departmental report 2005 · 2014-01-17 · i am delighted to be introducing my first departmental...

DEPARTMENT OF

TRADE AND INDUSTRY

Cm 6536

Departmental Report 2005

CONTACT DETAILS:Department of Trade and Industry

1 Victoria Street

London SW1H 0ET

Telephone: 020 7215 5000

E-mail: [email protected]

Website: www.dti.gov.uk

This document is part of a series of

departmental reports (Cm 6521 to Cm 6548),

which, along with: the Main Estimates

2005/06; the document Public Expenditure:

Statistical Analyses 2005; and the Supply

Estimates 2005/06: Supplementary Budgetary

Information, present the Government’s

expenditure plans for 2005-08.

The DTI drives our ambition of ‘prosperity

for all’ by working to create the best

environment for business success in the

UK. We help people and companies

become more productive by promoting

enterprise, innovation and creativity.

We champion UK business at home and

abroad. We invest heavily in world-class

science and technology. We protect the

rights of working people and consumers.

And we stand up for fair and open markets

in the UK, Europe and the world.

Department of Trade and IndustryDepartmental Report 2005

Presented to Parliament by the Secretary

of State for Trade and Industry and the

Chief Secretary to the Treasury by

Command of Her Majesty.

June 2005

Cm 6536 £29.50

© Crown Copyright 2005

The text in this document (excluding the Royal Arms and departmentallogos) may be reproduced free of charge in any format or mediumproviding that it is reproduced accurately and not used in a misleadingcontext. The material must be acknowledged as Crown copyright and thetitle of the document specified.

Any enquiries relating to the copyright in this document should beaddressed to The Licensing Division, HMSO, St Clements House,2-16 Colegate, Norwich, NR3 1BQ. Fax: 01603 723000 or e-mail:[email protected]

I am delighted to be introducing my firstDepartmental Report as Secretary of State forthe DTI. It covers my Department’s activitiesand achievements over the past year andhighlights some of the work we have plannedin the forthcoming year.

The requisite for industrial success is a strongand stable economy. We are enjoying thelongest sustained growth in GDP on record,the longest period of sustained low inflationfor 40 years and the highest employmentlevels in our history. We have 300,000 morebusinesses than in 1997, with new companiesstarting up at the rate of more than 1,000 aday – and our science base is strong, becausewe’ve reversed decades of under-investment.

Our workers and businesses have excelledwithin a supportive economic framework setby this Government, while we have coupledindustrial success with the introduction ofdecent, civilised minimum standards foremployees.

This Government has every right to be proudof its record. But on the threshhold of ourhistoric third term in Government there arenew dilemmas and fresh challenges.

The industrial landscape is changing fast.Within a generation, China will challenge theUS as the largest economy in the world.India is producing three million highly skilledgraduates a year. Ten new Central and EasternEuropean democracies – with wage costs afraction of ours – have joined the EuropeanUnion.

Meanwhile, technology and scientificunderstanding are changing our world fasterthan ever before. We cannot and should nothold back technological change or competeon low wages and poor working conditions.But we can compete on the basis ofproducing high value-added goods andservices that the world wants to buy.

The DTI plays a vital role in this challengeby championing world-class science andtechnology, supporting British businesssuccess, ensuring fair and flexible marketsand delivering secure and sustainable energy.

Over the last year, our achievements havebeen considerable.

We’ve provided practical advice and help to arecord 620,000 businesses and peoplethinking of starting up through Business Link.We’ve helped 4,000 UK exporters engage withoverseas markets new to them and helped afurther 1,500 export for the first time throughUKTI, lobbied for greater economic reform inEurope and played a key role in moving theDoha Development Round forward.

We’ve launched Consumer Direct, providing18 million consumers in Scotland, Wales,Yorkshire and the Humber and the South Westof England with access to clear, practicalconsumer advice.

We’ve enabled some 800,000 parents tobenefit from flexible working arrangementsand up to 1.6 million people from the increasein the National Minimum Wage.

1

FOREWORD

We’ve set up the Women and WorkCommission to ensure that women get a fairdeal at work and launched 22 Sector SkillsCouncils to meet skills gaps.

We’ve established the NuclearDecommissioning Authority which, by 2010,will have the reduced the civil nuclear liabilityby 10%.

We’ve developed the role of the ShareholderExecutive, which is now located in the DTIand responsible for the management of DTIshareholdings. It continues to ensure theGovernment’s portfolio of businesses is runmore effectively across all Departments withthe target of enhancing the value of keybusinesses in the portfolio by £1 billion.

We’ve secured a substantial spendingsettlement, boosting our spending on scienceand innovation by £1 billion, technology by£205 million and doubling RDA spending to£483 million by 2008.

We’ve published our Five Year Programme,which commits us to reducing the regulatoryburden by £1 billion, establishes a multi-millionpound Newton Award fund for researchbreakthroughs and highlights our plans toattract and retain global entrepreneurial talentand academic expertise.

And it commits the DTI to changing as theworld around us changes too. We arebecoming more streamlined and flexible,more agile and much smarter.

I am grateful to the very many people, bothwithin the Department and outside of it,who have contributed to these importantachievements and I give my commitmentto build on them in the coming year.

The Rt Hon Alan Johnson MP

Secretary of State for Trade and Industry

DTI Departmental Report 2005

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The Department has a Welsh Language Scheme, drawn up in accordance with the Welsh Language Act 1993 and approved by the Welsh LanguageBoard. The full text of the Scheme is available, in both English and Welsh, at www.dti.gov.uk/about/welsh/english/english.pdf

Pleser o’r mwyaf i mi yw cyflwyno fyAdroddiad Adrannol cyntaf fel YsgrifennyddGwladol dros y DTI. Mae’n cwmpasugweithgarwch a chyraeddiadau fy Adran dros yflwyddyn ddiwethaf, gan bwysleisio rhywfainto’r gwaith sydd yn yr arfaeth gennym i’rflwyddyn sy’n dod.

Mae angen economi cryf a sefydlog i sicrhaullwyddiant diwydiannol. Gwelwn ar hyn o brydy twf cyson hiraf sydd ar glawr a chadw o ranCynnyrch Mewnwladol Crynswth, y cyfnodhiraf o chwyddiant cyson isel ers 40 mlynedda’r lefelau cyflogaeth uchaf yn ein hanes. Maegennym 300,000 yn fwy o fusnesau nag ym1997, gyda mwy na 1,000 o fusnesau newyddyn cychwyn bob dydd – ac mae’n sylfaengwyddoniaeth yn gref oherwydd inni wrthdroidegawdau o danfuddsoddi.

Mae’n gweithwyr a’n busnesau wedi rhagori ofewn fframwaith economaidd cefnogol wedi eiosod gan y Llywodraeth hon, a’r un pryd âgwireddu’r llwyddiant diwydiannol hwn fegyflwynwyd gennym safonau isafbwyntgwaraidd a gweddus i weithwyr.

Mae gan y Llywodraeth hon bob hawl i fod ynfalch o’i record. Ond ar drothwy’n trydyddtymor llywodraethu, sydd ynddo’i hun ynhanesyddol, wynebir cyfyngderau a heriaunewydd.

Mae’r dirwedd ddiwydiannol yn newid yngyflym. O fewn cenhedlaeth, bydd Tsieina’nherio’r Unol Daleithiau fel economi mwya’rbyd. Mae India’n cynhyrchu tair miliwn oraddedigion medrus iawn bob blwyddyn. Maedeg democratiaeth newydd yng Nghanolbarth

a Dwyrain Ewrop – a’u costau cyflog ynffracsiwn yn unig o’n heiddo ni – wedi ymunoâ’r Undeb Ewropeaidd.

Yn y cyfamser, mae technoleg a dealltwriaethwyddonol yn herio’n byd ynghynt nag erioedo’r blaen. Ni allwn ac ni ddylem ddal newidtechnolegol yn ôl na chystadlu o ran cyflogauisel ac amodau gwaith gwael. Ond fe allwngystadlu ar sail cyhyrchu nwyddau agwasanaethau o werth ychwanegol uchel ybydd gweddill y byd am eu prynu.

Mae’r DTI yn chwarae rhan hanfodol yn yr herhon drwy bleidio gwyddoniaeth a thechnolego’r radd flaenaf, cefnogi llwyddiant busnesPrydain, sicrhau marchnadoedd teg a hyblyg, achynnig ynni diogel a chynaliadwy.

Dros y flwyddyn a aeth heibio, bu’ncyraeddiadau’n sylweddol.

Rhoesom gyngor a chymorth ymarferol i620,000 o fusnesau a phobl oedd yn meddwlam sefydlu busnes drwy Business Link – ynifer uchaf hyd yn hyn. Bu inni helpu 4,000 oallforwyr y DU i gysylltu â marchnadoeddtramor oedd yn newydd iddynt a helpu 1,500arall i allforio am y tro cyntaf drwy UKTI,gwasgu am ddiwygio economaidd pellach ynEwrop a chwarae rhan allweddol wrth symudcyfres bresennol Trafodaethau Datblygu Dohaymlaen.

Lansiwyd Cyswllt Defnyddwyr i’w gwneud ynhaws i 18 miliwn o ddefnyddwyr yngNghymru, yr Alban, Swydd Efrog a’r Humber aDe-orllewin Lloegr fanteisio ar gyngorymarferol clir.

3

RHAGAIR

Galluogwyd rhyw 800,000 o rieni i fanteisio ardrefniadau gwaith hyblyg a helpwyd hyd at1.6 miliwn o bobl drwy gynyddu’r LleiafswmCyflog Cenedlaethol.

Sefydlwyd y Comisiwn Merched a Byd Gwaithi sicrhau bod merched yn cael chwarae teg yny gwaith, ac fe lansiwyd 22 o GynghorauSgiliau Sector i ddiwallu unrhyw fwlch o ranmedrau.

Sefydlwyd yr Awdurdod Digomisiynu Niwcleara fydd, erbyn 2010, wedi gostwng yrhwymedigaeth niwclear sifil o 10%.

Bu inni ddatblygu swyddogaeth yWeithrediaeth Gyfranddeiliaid, sydd bellachwedi ei lleoli o fewn y DTI ac yn gyfrifol amreoli cyfranddaliadau’r DTI. Mae’n dal i sicrhaubod portffolio busnesau’r Llywodraeth yn caelei redeg yn fwy effeithiol ar draws pob Adran,gyda’r nod o hybu gwerth busnesau allweddolo fewn y portffolio o £1 biliwn.

Sicrhawyd gennym gytundeb gwariantsylweddol i hybu’n gwariant ar wyddoniaeth ablaengaredd o £1 biliwn, technoleg o £205miliwn a dyblu gwariant ein HawdurdodauDatblygiad Rhanbarthol i £483 miliwn erbyn2008.

Bu inni gyhoeddi’n Rhaglen Bum Mlyneddsy’n ein rhwymo i leihau’r baich rheoleiddio o£1 biliwn, yn sefydlu cronfa Gwobrau Newtonsy’n werth sawl miliwn o bunnoedd i hybudatblygiadau ymchwil, ac yn pwysleisio’ncynlluniau i ddenu a chadw doniauentrepreneuraidd a medr academaiddbydeang.

Ac mae’n rhwymo’r DTI i newid wrth i’r bydo’n hamgylch newid yntau. Deuwn yn fwyhyblyg a diwastraff, yn fwy sionc a doeth.

Rwy’n ddiolchgar i’r bobl niferus iawn, o fewnyr Adran a’r tu allan, sydd wedi cyfrannu at ycyraeddiadau pwysig hyn ac ymrwymaf iadeiladu ar eu sail dros y flwyddyn sy’n dod.

Y Gwir Anrh. Alan Johnson AS

Ysgrifennydd Gwladol dros Fasnach aDiwydiant


4

Mae gan yr Adran Gynllun laith Gymraeg, wedi ei lunio yn unol â Deddf yr laith Gymraeg 1993 ac wedi ei gymeradwyo gan Fwrdd yr laith Gymraeg.Mae testun llawn y cynllun i’w gael, yn Gymraeg ac yn Saesneg, yn www.dti.gov.uk/about/welsh/english/english.pdf

Foreword (English) 1

Foreword (Welsh) 3

Contents 5

Introduction 6

Section A: Aims, Objectivesand Targets 121. DTI Strategy 132. Progress on Delivering PSA Targets 16

Section B: Business Plansand Performance 62Promoting World Class Science and Innovation3. Science and Engineering 634. Knowledge Transfer and Innovation 73Supporting Successful Business5. Enterprise, Growth and Business

Investment 786. Strengthening Regional Economies 887. UK Trade & Investment 958. Effective Channels with Business 101Ensuring Fair Markets9. Extending Competitive Markets 10610. Maximising Potential in the

Workplace 11411. Corporate and Insolvency Activity

Framework 121Secure, Sustainable, Affordable Energy 12. Sustainability and the Environment 12813. Security of Energy Supply 13314. Nuclear Security and Export Control 13715. Assets and Liabilities 141The Executive Agencies 16. The Executive Agencies 148

Section C: Managing theDepartment 16017. Managing the Department 161

Annexes

Annex A: Core Tables 170A1 Total Public Spending 171A2 Resource Budget 172A3 Capital Budget 173A4 Capital Employed 174A5 Administration Costs 175A6 Staff Numbers 176A7 Total Spend by Country/Region 178A8 Total Spend per Head by

Country/Region 178A9 Spend on Function/Programme

by Country/Region for 2003/04 179

Annex B: Supplementary Tables 182B1 Resource Estimate Tables 183B2 Statement of Contingent or

Nominal Liabilities 198B3 Research Council’s Grant-in-Aid 203B4 Research Council’s Long

Term Projects 210B5 Non-Departmental Public Bodies 215B6 Senior Civil Service Salaries 220B7 DTI Public Appointments 221

Annex C: Managing the Department 229C1 Electronic Service Delivery 230C2 Better Regulation 234C3 Investment and Asset Management 240C4 Capital Modernisation Fund 240C5 Invest to Save Budget 240C6 Public Accounts Committee Reports 241C7 Environmental Performance 243C8 Health and Safety Report 245

List of Chapters/Figures 247

Index 250

5

CONTENTS

Introduction

This report sets out the Government’sExpenditure Plans for the Department of Tradeand Industry (DTI) for 2005-08. It also assessesperformance against targets and provides asummary of significant developments in2004/05. The Report covers the DTI (includingUK Trade & Investment) and the UK AtomicEnergy Authority (UKAEA) SuperannuationFunds (please note that from 2005/06 thename will change to UKAEA PensionSchemes). It supplements the FinancialStatement and Budget report 2004/05.

The Department’s expenditure and budgetingare managed on a full resource basis and thisis reflected in the tables at Annex A. Theaudited consolidated resource accounts for the

financial year 2003/04 were published inNovember 20041. They provide details of theDepartment’s activities during the 2003/04financial year and its Balance Sheet at 31March 2004. The Department also issuedaudited resource accounts for the UKAEASuperannuation Schemes for 2003/04. TheNational Audit Office issued unqualified auditopinions on both sets of accounts.

During the period covered by this report theShareholder Executive transferred from theCabinet Office to the DTI. The transferredfunctions were merged with units within theDepartment dealing with postal services, theUKAEA and British Nuclear Fuels plc (BNFL) toform an enlarged Executive dealing with theGovernment’s shareholdings in publicly ownedcompanies2.

6

INTRODUCTIONIntroduction

Ministerial Responsibilities

Structure of the Department

Structure of the Report

Ministerial Responsibilities

The Ministerial Responsibilities shown below reflect the position after the General Election in May 2005.

Minister of State forEnergy

Malcolm Wicks MP

» Responsible for Secure, sustainable affordableenergyPortfolio: Overall responsibility for Energy issues;Sustainability & the environment; CorporateSocial Responsibility; Security of energy supply;Fuel poverty; Nuclear security & export control.

Secretary of State for Trade

and Industry

The Rt. Hon. Alan Johnson MP

» Overall responsibility for the Department ofTrade and Industry

1 www.dti.gov.uk/expenditureplan/dtiacc0304.pdf2 For further detail on the work of the Shareholder Executive please see Chapter 15 ‘Assets and Liabilities’

Introduction

7

Parliamentary Under

Secretary of State for

Women and Equality

Meg Munn MP

» Responsible for Women and Equality(reporting to Tessa Jowell, Minister forWomen, on women’s issues).Portfolio: Gender and Equality Legislation;Occupational segregation and equal pay;Mainstreaming gender across government;supports Gerry Sutcliffe on Work and Families;supports Alun Michael on Women’s Enterprise

Parliamentary Under


Competitiveness

Barry Gardiner MP

» Responsible for Delivery and EfficiencyPortfolio: Shareholder Executive (includingRoyal Mail); Companies House; Betterregulation; supports Ian Pearson on ExportCredits Guarantee Department (ECGD);supports Alun Michael on Small Businessissues.

Parliamentary Under


Employment Relations and

Consumer Affairs

Gerry Sutcliffe MP

» Responsible for Ensuring Fair MarketsPortfolio: Extending competitive markets;Maximising potential in the workplace; Corporate& insolvency activity; Insolvency Service;Employment Tribunal Service; ACAS.

Parliamentary Under

Secretary of State for Science

and Innovation

Lord David Sainsbury of Turville

» Responsible for Promoting World ClassScience & InnovationPortfolio: Science & Engineering; 10 yearinvestment framework for science & innovation;Office of Science and Technology (OST);Research Councils; Knowledge Transfer &innovation; Technology Strategy; Patent Office;National Weights and Measures Laboratory(NWML); Bioscience (excluding GM); BritishNational Space Centre (BNSC).

Minister of State for Trade

(joint with FCO)

Ian Pearson MP

» Responsible for Trade Policy and Foreign AffairsPortfolio: UK EU Presidency 2005; Europe andWorld trade policy; UK Trade & Investment(UKTI); Export Credits Guarantee Department(ECGD).

Minister of State forIndustry and the Regions

The Rt. Hon. Alun Michael MP

» Responsible for Supporting Successful EnterprisePortfolio: Enterprise, growth and businesssectors (including construction); Strengtheningregional economies; Small Business Service;Social Enterprise; E-commerce; Communicationsand Information Industries; Digital Strategy;GM issues.

Structure of the Department

Office of Science and Technology

The Secretary of State for Trade and Industryhas overall responsibility for the Government’sscience policy and support for Science andTechnology (S&T) as a whole in his cross-Departmental role as the Cabinet Minister forScience and Technology. He is supported in thisrole within the DTI by the Minister for Scienceand the Office of Science and Technology (OST).OST leads for Government in supportingexcellent science, engineering and technologyand their uses to benefit society and theeconomy. OST’s objectives are to sustain andimprove the science and engineering base;improve the performance of Governmentdepartments using S&T; optimise the benefits toUK science from EU and international activities;improve the flow of people and ideas betweenthe science and engineering base and users;improve engagement between science and therest of society; and ensure sound advice isgiven to Ministers across Government onscience issues.

Strategy Unit

The Strategy Unit provides a clear, shared andcoherent strategic direction based on rigorousand forward looking evidence. This strategicdirection drives business planning andperformance management to ensure thedelivery of priorities. The Unit leads thedevelopment of thinking in the DTI, andacross Whitehall, on productivity andcompetitiveness; provides relevant economicand statistical analysis; and communicatesDTI’s key messages to people within the DTI,key external stakeholders and others.

Legal Services Group

The aim of Legal Services Group is to ensurethat the Ministers and officials of the DTI andits Executive Agencies receive the highestquality legal services they need to deliverDepartmental objectives. It also has an

influencing role in Whitehall in representingthe Department’s interests on Europeanissues. Legal Services Group furthercontributes to the DTI’s objectives throughits enforcement effort, by investigating andprosecuting criminal offences uncovered byother parts of the Department, principally theInsolvency Service and CompaniesInvestigation Branch (CIB). As well ascasework, the Group advises the Departmenton any issues involving criminal law and policy.It also has a wider role in the criminal justicefield. It provides legal support for CIB in theirinvestigations and runs the WhitehallProsecutors Group, which provides a forumfor government prosecutors to meet and sharebest practice.

Business Group

Business Group plays a key role in raisingproductivity and so in delivering theDepartment’s ambition of Prosperity for All.Business Group contributes to all three of theDepartment’s strategic objectives ofsupporting successful business, promotingworld-class science and innovation andensuring fair markets. To achieve this we willwork with businesses, England’s RegionalDevelopment Agencies (RDAs), otherGovernment Departments, the devolvedadministrations and other parts of the DTI –particularly the Innovation and Fair MarketsGroups.

Innovation Group

The Innovation Group provides a focus for theDepartment’s work to improve the overallinnovation performance of the UK economy,working closely with Business Group, OST andother parts of DTI. The Group also supportsthe Secretary of State in driving forward theinnovation agenda across Government. TheGroup’s activities include: promoting thebusiness benefits of innovation; supportingknowledge transfer into UK businesses from awide range of domestic and internationalsources; spreading best practice in business;


8

stimulating business investment in innovation;working with others to raise the calibre anduse of management, leadership and workforceskills by businesses; encouraging innovativeand internationally competitive businesssolutions to environmental problems and thewider challenges of sustainable development;ensuring that the intellectual property systemsupports innovation; and ensuring that the UKhas the infrastructure needed to encourageinnovation, including measurement systemsand standards.

Energy Group

Energy Group’s aim is to deliver a fundamentalcomponent of Prosperity for All – secure,sustainable, affordable energy. The Groupworks to ensure that competitive marketsprovide continuity and security of energysupplies at affordable prices; to promotesustainability by delivering the reductions incarbon dioxide emissions set out in the EnergyWhite Paper; to manage energy assets andliabilities efficiently and effectively; and toensure safety and security in the civil nuclearindustry.

Fair Markets Group

Fair Markets has a central role in deliveringProsperity for All. The group’s role is to delivera competitive framework for the growth ofsuccessful business and jobs, and a fair dealfor employees and consumers. It does this bycreating open and dynamic markets – througheconomic reform in Europe, free and fair worldtrade and an effective competition regime.And by creating confident participants –including empowered employees, dynamicbusinesses and active consumers andinvestors who are assured by the fairness andintegrity of the market framework, wellinformed about rights and responsibilities, andembrace the benefits of diversity.

Services Group

Services Group is the spine of the DTI.Its vision is to enable change within theDepartment and to deliver excellent services.It enables the rest of the Department tofunction through providing internal coreservices like personnel, finance,accommodation and IT, and delivers servicesto external customers through XNP (ExportControl and Non-Proliferation) and a number ofindividual Agencies (Companies House, TheInsolvency Service and The EmploymentTribunals Service).

Shareholder Executive

The Government is owner of, or shareholder ina large and diverse portfolio of businesses.The over-arching objective of the ShareholderExecutive is to fundamentally improve theprofessionalism of Government Departmentsin exercising their responsibilities as owners ofthose businesses and thereby improve theperformance of the Government’s portfolio.It is closely aligned with the DTI objective ofraising UK productivity and continues to workacross Government by advising Departmentson their ownership role or by directly fulfillingthe ownership role on the shareholdingDepartments’ behalf.

Introduction

9

Structure of the Report

The structure of this Report has changed fromthat for the Departmental Report 20043 toensure that it matches the DTI’s recentlydeveloped business objectives for 2005/06.

In Section A (Aims, Objectives and Targets)Chapter 1 summarises the Department’s aimsand objectives and sets out how theDepartment will achieve them. Chapter 2covers the Department’s progress ondelivering its Public Service Agreement (PSA)targets and lists the PSA targets agreed aspart of the Spending Review 20044.

Section B (Business Plans and Performance)covers the Department’s business objectivesfor 2005/06 and performance in 2004/05.In each chapter we report against the plans

outlined in Annex B of the DTI Business Plan2004-07 grouped by topic area for ease ofnavigation and our plans for 2005/06.Wherever possible the work of the ExecutiveAgencies and Public Bodies has beenincorporated into the relevant businessobjective chapter, but Chapter 16 summarisesthese activities and sets out their respectiveperformance against targets.

Section C (Managing the Department) detailshow the Department is structured andmanaged, including information about itspeople, workplace, use of ICT, financemanagement and corporate governance.This section covers the corporate services,processes and activities that support theimplementation of the Department’s Strategy,Five Year Programme and Business Plan and


10

Catherine Bell

Interim Permanent Secretary

Group

UK Trade & Investment

Sir Stephen BrownGroup Chief Executive

Legal ServicesStrategy UnitOffice of Science and Technology

Sir David KingChief Scientific Adviser and Head of OST

Business Group

• Business Relations inc. Post Office

• Business Support• Small Business

Service• Regions

Innovation Group

• Facilitating Innovation

• Technological Innovation and SustainableDevelopment

• British National Space Centre

• Patent Office

Energy Group

• Energy StrategyUnit

• Energy MarketsUnit

• Energy Innovationand Business Unit

• Licensing andContents Unit

• Nuclear and CoalLiabilities Unit

• British Energy Team

Fair Markets Group

• Better Regulation• Consumer and

Competition Policy• Corporate Law

and Governance• Employment

Relations• Women and

Equality Unit• Europe and World

Trade• Acas• Central Arbitration

Committee• Low Pay

Commission

Services Group

• Export Control and Non-Proliferation

• Finance and ResourceManagement

• Human Resourcesand Change Management

• Information and WorkplaceServices

• Employment Tribunals Service

• Insolvency Service• Companies House

How the DTI is organised

3 Department of Trade and Industry Departmental Report 2004, April 2004 (Cm 6216. Available from HMSO and DTI Internet site:www.dti.gov.uk/expenditureplan/report2004/)

4 Full text at hm-treasury.gov.uk/spending_review/spend_sr04/spend_sr04_index.cfm

reports on how the Department is working todeliver efficiency.

Finally, the Report includes three annexes.Annex A contains the core financial tablesthat are common to all Departmental Reports.Annex B contains supplementary tablesdealing with particular aspects of theDepartment, such as public appointments andcontingent and nominal liabilities. Annex Ccontains information on managing theDepartment, including Electronic ServiceDelivery, Investment and Asset management,Public Accounts Committee reports,Environmental Performance, Health and Safetyand Better Regulation.

A table showing how the areas covered byeach chapter relate to chapters in the 2004Report can be found at the end of this Report.

Introduction

11

12

1 DTI Strategy

2 Progress on DeliveringPSA Targets

Section A

Aims,Objectivesand Targets

DTI Strategy

1.1 The DTI Strategy published inSeptember 20031 continues to providethe overarching framework for how theDepartment will deliver its ambition ofProsperity for All. Built on a soundevidence base, the Strategy identifies aset of priorities that focuses on raisingproductivity in the economy as a wholeand addresses areas where DTI canhave the greatest impact. TheDepartment aims to make a differencedirectly where it can and to work withits partners to influence outcomeswhere it cannot deliver on its own.

1.2 The Strategy identified five strategicpriorities for DTI to raise UKproductivity:

▼ Transferring knowledge – helpingbusiness turn good ideas into high valueproducts and services;

▼ Maximising potential in the

workplace – raising skill levels toproduce high value jobs in highperformance workplaces, where peoplecan realise their full potential whilemaintaining a healthy work-life balance;

▼ Extending competitive markets –creating fair markets at home andabroad to give consumers a fairer dealand more opportunity for new andexisting business;

▼ Strengthening regional economies –achieving sustainable improvements inthe performance of regions by helpingto develop regional economic strategiesthat also fit into the broader nationalframework; and

▼ Forging closer partnerships – workingin partnership within the UK, across theEuropean Union (EU) and internationallyto achieve the Department’s strategicpriorities and to have the greatestimpact on productivity.

1.3 The Strategy also recognised thatsuccessful implementation wouldrequire a strong focus on delivery andimproving performance. It identifiedthree principles to guide all DTI’s futuredelivery activities:

▼ Customer focus – knowing theDepartment’s customers and making itsservices easy to access and understand;

▼ Value for Money – prioritising to havethe greatest impact and making DTIservices simple to run; and

▼ Continuous improvement – managingprojects from start to finish, anticipating,developing and learning. Providingexcellent services at the lowest priceand striving continuously to improve thequality of everything the DTI does.

13

Chapter 1

DTI StrategyDTI Strategy

DTI Five Year Programme

DTI Business Plan

1 Full text at www.dti.gov.uk/about/strategy2003.html

DTI Five Year Programme

1.4 Building on the Strategy, the DTI’s FiveYear Programme, “Creating Wealth fromKnowledge”2, was published inNovember 2004. The Programmereaffirms the priorities of the Strategyand sets out how the UK will developa strong, modern, knowledge basedeconomy which can meet thechallenges posed by rapidly emergingeconomies and new technologies.It includes more detail on subsequentkey developments including theInnovation Report3, the Ten YearScience and Innovation Framework4,the Spending Review 2004 settlement5

and the Department’s EfficiencyProgramme6.

1.5 Like the Strategy, the Five YearProgramme is based on rigorousanalysis of the UK’s economic andproductivity performance. It sets outhow, over the next five years, DTI willwork with other Departments, business,trade unions and others at home, inEurope and globally, to:

▼ Stimulate the industries of the future

through science and technology –by working to increase the UK’sinvestment in Research andDevelopment (R&D) and bygovernment, universities and businessworking together to create, share andexploit knowledge and technology;

▼ Develop a new partnership with

industry – where government sets thecompetitive framework and ensures theavailability of knowledge, skills andscience; giving business the freedom toinnovate and encouraging individuals tocreate businesses of their own;

▼ Develop a new approach to

regulation and enforcement – inparticular to lessen the burden onsmall firms and entrepreneurs;

▼ Lead a stronger drive for reform in

Europe – to create more openmarkets so that business can operatesuccessfully across borders and theEU can increase productivity andinternational competitiveness;

▼ Transform the DTI – to become astronger voice for all business andinnovation in Whitehall, in Europe andinternationally.

DTI Business Plan

1.6 The strategic priorities, principles andactions in the Strategy and Five YearProgramme are implemented throughthe Department’s business planning.The Business Plan sets out theDepartment’s operational objectives andpriority actions. This Report sets out theDepartment’s achievements against itsplans in the DTI Business Plan 2004-07including the Priority Actions:

▼ Encourage innovation in UK businessesthrough our Innovation Action Plan (forfurther detail please refer to Chapter 4‘Knowledge Transfer and Innovation’);

▼ Raise national and regional economicperformance by working more effectivelywith the RDAs and other regional bodies(for further detail please refer to Chapter6 ‘Strengthening Regional Economies’);

▼ Offer better-targeted business support(reduced from over 100 schemes to nine)by introducing the remaining newproducts and closing previous schemes(for further detail please refer to Chapter 8‘Effective Channels with Business’); and


14

2 Full text at www.dti.gov.uk/fiveyearprogramme.html3 www.dti.gov.uk/innovationreport/index.htm4 Full text at www.hm-treasury.gov.uk/spending_review/spend_sr04/associated_documents/spending_sr04_science.cfm5 www.hm-treasury.gov.uk/spending_review/spend_sr04/spend_sr04_index.cfm6 For more information on Delivering Efficiency please see Chapter 17 ‘Managing the Department’ and the Department’s Efficiency Technical Note at

www.dti.gov.uk/efficiency_technicalnote.html

▼ Drive forward the decommissioning andclean-up of the UK’s civil nuclear sitesby establishing the NuclearDecommissioning Authority by April2005 (for further detail please refer toChapter 15 ‘Assets and Liabilities’).

1.7 Delivery of the Business Plan ismonitored quarterly as part of theDepartment’s approach to performancemanagement and within the frameworkof its Public Service Agreement withHM Treasury. The priority actions thatour Executive Board will monitor mostclosely during 2005/06 will be:

▼ Security of energy supply;

▼ The implementation of our 10-yearScience and Innovation InvestmentFramework;

▼ Progress on developing the national/regional partnership; and

▼ Opening up markets through the EUPresidency.

15

Introduction

2.1 The purpose of this chapter is to set outDTI’s progress in delivering its PublicService Agreement (PSA) targets as setout in the 1998, 2000 and 2002Spending Reviews.

2.2 This chapter focuses mainly on thetargets from the 2002 Spending Review,covering the period 2003-06. There are12 PSA targets for this period, eachunderpinned by a Technical Note, whichgives more information on how thetarget is to be measured1.

2.3 For the 12 targets:

▼ nine are assessed as “on course;”

▼ one is assessed as “outcomes havebeen mixed;” and

▼ two are assessed as showing“slippage.”

2.4 Several of these targets were carriedover in similar form from the 2000Spending Review which covered theperiod 2001-04. There are also sometargets carried over from theComprehensive Spending Review (CSR)period, 1999-2002. In some cases thereis an outstanding target from an earlierSpending Review which is associatedwith an SR2002 target but sufficientlydifferent to merit separate reporting.In these cases, an update has beenprovided alongside the relevant SR2002

target. At the end of this chapter aretables summarising progress against thetwo previous sets of PSA targets.

2.5 The 2004 Spending Review set out 11new PSA targets for the period 2005-2008. These targets represent a largedegree of continuity with the current setof targets, and are listed at the end ofthis chapter2.

Overall progress

On course

Current position

2.6 Data from the Office for NationalStatistics (ONS) published in February2005 shows that, on both the outputper worker and output per hour workedmeasures, the UK is making progress innarrowing its productivity gap with

Demonstrate progress by 2006on the Government’s long-termobjective of raising the rate of UKproductivity growth over theeconomic cycle, improvingcompetitiveness and narrowingthe productivity gap with the US,France and Germany. (Jointtarget with HM Treasury)

PSA Target 1

16

Chapter 2

Progress on DeliveringPSA Targets

1 These can be found at www.dti.gov.uk/about/psa/index.htm2 Technical Notes for the SR2004 PSA targets can be found at www.dti.gov.uk/psa_target.html

France and Germany. However, theproductivity gap relative to the US isbroadly unchanged over the period.

2.7 Two different measures are used toassess international comparisons ofproductivity: productivity on a per workerbasis; and productivity on a per hourworked basis. The charts below showthat, relative to Germany, the UK is nowas productive on the output per workermeasure and that the UK has seen animprovement in relative per hourproductivity levels (an improvement ofseven percentage points since 1997 –the most recent internally comparableyear). Moreover, the gap with France hasnarrowed on both measures since 1997with a seven percentage pointimprovement in output per hour workedsince 1997. However, the gap with theUS on both measures is unchanged.Taken together the data suggests the UKis heading in the right direction. Theseresults are broadly consistent with botha 1995 and 2000 baseline.

2.8 These findings on relative productivityperformance are more positive thanthose reported in the AutumnPerformance Report and reflect the

impact on the international comparisonsof productivity (ICP) statistics of theOrganisation for Economic Co-operationand Development (OECD) revising itspurchasing power parities data. This hastended to reduce the relative price levelin the UK, thus indicating a better UKproductivity performance than waspreviously thought to be the case.These changes highlight the fact thatthis data is subject to revision.

2.9 HM Treasury estimates in the PreBudget Report 2004 that UK actualproductivity (output per hour) grew at2.50% per annum between the first halfof 1997 and the third quarter of 2001,compared to 2.08% between thesecond quarter of 1986 and the first halfof 1997. Underlying productivity growthincreased from an average of 2.29% perannum in the earlier period to 2.70%per annum between the first half of1997 and the third quarter 2001.

2.10 It takes time for workers, businessesand consumers to respond to far-reaching structural reforms and to gainthe confidence to invest in capital ortheir own skills to increase productivityfurther. Consequently, in assessing

Progress on Delivering PSA Targets

17

Source: Office for National Statistics

90

100

110

120

130

140

20032002200120001999199819971996199519941993199219911990

France

UK=100

US Germany

International Comparisons of Productivity per workerFigure 2.1:

hours worked and the PurchasingPower Parity (PPP) data used tocompare prices internationally.

2.13 The sources of data used in theindicators of productivity were selectedfollowing two extensive consultationsundertaken in 1999, and followingBudget 2004. The data for the indicatorsare derived from a variety of sources,including national statistical agencies,the OECD and the World Bank, each ofwhich is subject to peer reviewprocesses.

Forward Look

2.14 This target is rolled forward in similarterms as SR2004 PSA target 1. TheDepartment’s overarching ambition ofraising productivity is a key element inits business plan objectives. More detailof the DTI’s Strategy can be found inChapter 1.

Overall progress

On course

Relative performance of the science and

engineering base

Current position

2.15 On course. Progress against thisobjective is judged against a basket ofsix indicators including aspects of

scientific excellence and productivity anddevelopment of trained researchers.These indicators are derived fromEvidence Ltd’s benchmarking study intothe performance of the UK science andengineering base. The second report3

(2004) continues to show the strongrelative performance of the UK ResearchBase in terms of achievement,productivity and efficiency.

▼ Share of all world citations

(Thompson ISI)

The most recent available data are for2003, in which the UK percentage worldshare measured 11.9%. The target is toattain a percentage world share of11.5% by 2006 (1997 = 11.2%). Theaverage share for the five-year period1998-2002 was 11.6%.

▼ Share of world citations in each of

the nine broad science disciplines

(Thompson ISI)

The most recent available data are for2003, in which the UK is second in theG8 in six broad science disciplines;Clinical, Pre-Clinical and Health,Biological, Environmental, SocialSciences and Business, third inMathematics and fourth in PhysicalSciences and Engineering. The target isto remain in the top three in the G8 inseven of the nine Super Units ofAssessment (SUoAs)4 by 2006.

▼ Researchers per 1,000 workforce

(OECD)

The most recent available data are for2002, in which the UK has 5.8researchers per 1,000 workforce(1997 = 5.1). The target is to have 6.3researchers per 1,000 workforce by20065.

Improve the relative internationalperformance of the UK’s scienceand engineering base, theexploitation of the science base,and the overall innovationperformance of the UK economy.

PSA Target 2


19

3 Available at www.ost.gov.uk/research/psa_target_metrics.htm4 An amalgamation of 68 Research Assessment Exercise (RAE) Units of Assessment, based on commonality of journal publication submission.5 The target and baseline for this indicator have changed since last year’s report. The basis on which data for this indicator are captured and

presented has changed, with the result that all data has seen an uplift. This methodological change means that we are already more than meetingthe original target of 5.3. Therefore to maintain the degree of challenge a new target of 6.3 has been agreed.

▼ Citations per £1 of publicly performed

R&D, citations relative to GDP and

citations per researcher (Thompson

ISI/OECD)

The most recent available data are for2002, in which the UK heads the G8 onthese three efficiency measures. Theaim is for the UK to maintain its leadingposition in the G8 in terms of efficiency,as judged by these three indicators.

▼ Sustainable and financially robust

universities and public laboratories

DTI continues to work with otherstakeholders on developing indicators toinform progress against this attribute.Milestones achieved so far in theimplementation of the “TransparentApproach to Costing” (TRAC) process(the Office of Science and Technology(OST)/Research Councils) include:

▼ Draft TRAC guidance (costingmethodology) issued to HigherEducation sector February 2004;

▼ Research Council overall requirementspublished September 2004.

Factors affecting performance

2.16 The use of citations for assessing theperformance of the science base meansthat account has to be taken of thenature of this type of data. Citationsaccumulate over time so older paperstend to have more citations than recentwork. Papers less than eight years oldare usually still accumulating citations.Citation performance peaks only ataround six years after publication and itis a recognised feature that the UKattracts citations at a faster rate thanother countries. Very recent data willtherefore tend to exaggerate UKperformance.


20

Indicator 2002/2003 2001/2002 2000/2001 1999/2000

Number of new patent applications filed by HEIs 1209 960 896 725

Number of UK patents granted 371 198 250 188

Number of licensing agreements 749 614 757 581

Income from licensing intellectual property (£m) 37 47 18.4 23.4

Number of spin-outs 1976 213 248 203

Proportion of the membership of HEI governing bodies drawn from the business sector 34% 36% 34% 35%

Income from business (value of consultancy contracts) (£m) 168.15 122 103.5 76.5

Number of full-time-equivalent (FTE) staff employed in commercialisation/industrialisation liaison offices 2,283 1,836 1,538 1,268

Number of science and engineering students (undergraduates and postgraduates) receiving enterprise training 24,962 12,126 11,143 1,900

Publication and patents jointly authored No data currently available. between science base and industry Currently exploring possible sources for this data

Source: HEBCI

Higher Education Business Community Interaction (HEBCI) Survey IndicatorsFigure 2.3:

6 Although the numbers of new spin-outs has declined (down from 213 to 197) there has been an increase in both the numbers of employees (upfrom 12,164 to 12,660) and turnover (up from £289,764k to £355,878k).

Quality of data systems used

2.17 Second international benchmarkingstudy undertaken by Evidence Ltd(October 2004) on behalf of the DTIwhich compares the UK against acomparator group of 25 countries whichincludes the G8. Data sources for study:

▼ Thomson ISI, the world’s premiersource of information on scientificjournal outputs and their citations;

▼ OECD, a major source for internationalresearch and development statisticalanalyses.

The exploitation of the science base

Current position

2.18 On course. Progress against thisobjective is judged by an increase in abasket of indicators. The most recentdata for these indicators for HigherEducation Institutes (HEIs) covers theacademic year 2002/03.

2.19 Comparable data are now available forPublic Sector Research Establishments(PSREs) from the first annual survey ofPSREs’ knowledge transfer activities,published in February 2005. Thisprovides baseline data to measurePSRE progress in future years.


2.20 The Government is providing supportfor scientists and business to worktogether to drive innovation, and isencouraging collaboration betweenHEIs and business to ensure scientificbreakthroughs are turned intocommercial success through a numberof schemes for UK HEIs. These supportentrepreneurship training,commercialisation and development oflinks between universities and business.These include Higher EducationInnovation Fund (HEIF), UniversityChallenge (UC) and Science EnterpriseChallenge (SEC). These funding streamswere consolidated into HEIF round 2and in June 2004 we announced theoutcome of HEIF 2, which providedawards worth more than £185 million –the largest amount yet to be given tosupport knowledge transfer fromuniversities and higher educationinstitutions to business and the widercommunity.

2.21 Data from the latest “Higher EducationBusiness Community Interaction”(HEBCI) survey, which is listed above,indicates these initiatives are making areal impact (see fig 2.3).

2.22 PSRE knowledge transfer activities aresupported through the Public SectorResearch Exploitation Fund, which has


21

Indicator PSREs 2003/04: data from PSRE respondents

Business representatives on governing bodies 175

Staff employed in commercialisation/industrial liaison offices (FTEs) 385 (average 3-4 per PSRE)

Number of patent applications 316

Number of patents granted 228

Number of licensing agreements 621

Income from Intellectual Property (IP) licensing £33m

Number of spin-outs 69

Income from business £73mSource: PSRE Survey

Public Research Sector Establishments (PRSE) Survey IndicatorsFigure 2.4:

provided £25 million over two rounds offunding to support the commercialisationof PSRE research. The data from thePSRE survey (see fig 2.4) indicates thatPSREs provide an important source ofresearch which can be commercialised.The Government will continue to supportthis activity through running a thirdround of the PSRE Fund later this year.


HEBCI

2.23 Data on university exploitation activityare measured systematically throughthe HEBCI survey. The survey isconducted annually by the HigherEducation Funding Council for England.The fourth HEBCI survey, covering100% of all UK HEIs, was published inFebruary 2005.

2.24 The survey report analyses a widevariety of knowledge transfer, includinglicensing of technology, regionalregeneration, provision of professionaltraining courses and consultancy. Thereport also looks at HEIs’ policies,priorities and resourcing in business andthe community activities.

2.25 Specific measures and benchmarkingwere developed in the survey, with anemphasis on repeatability androbustness, to give institutions and theirstakeholders valuable data about theircontribution to wealth creation and thesocial economy. This report is based ondata for the academic accounting yearAugust 2002 to July 2003.

PSRE

2.26 This survey was sent to all PSREs in theUK – Research Council Institutes,Government Laboratories, NHSInnovation Hubs and major museums –with a 78% response rate.

2.27 This survey covers the same coreindicators as the HEBCI survey (exceptnumber of students receivingentrepreneurship training, which is notappropriate for many PSREs).

2.28 In addition, the PSRE survey includes anumber of other questions which takentogether are intended to provide a morecomprehensive picture of PSREknowledge transfer activities, includingnumber of invention disclosures,numbers of collaborative projects andagreements with users, number ofpublications and invited PSREs toprovide information on other knowledgetransfer activities not covered above.This survey will now be run annually,with the figures for the current surveyproviding baseline data.

The overall innovation performance of the

UK economy

Current position

2.29 On course. There are seven indicatorsfor progress towards this target. Five ofthese are measured through theCommunity Innovation Survey (CIS) andthere are no updated data, as the CIS iscurrently a four-yearly survey which willnext take place in 2005, with resultsavailable in early 2006. The 2001 surveyprovided baseline data for these targets.

2.30 However for two of the indicators dataare available annually with a lag ofapproximately 10-12 months. For theseindicators:

▼ The level of business enterpriseresearch and development expenditure(BERD) rose to 1.23% of GDP in 2003from 1.17% in 1998;

▼ On OECD data, there has been adecrease in the level of UK patenting in2002 and 2003, although there has beena positive trend over the last nine yearsoverall.


22

2.31 The most recent data are shown infigs 2.5 and 2.6.


2.32 The economy level innovation indicatorsused for this objective are inevitablyavailable with a lag and the DTI usesother available information to assess theongoing effectiveness and expectedfuture impact of expenditure in advanceof the survey evidence.

2.33 In the context of the Technical Notesupporting this PSA target, DTI willexpand the coverage of specific policyactions and the time lines fordeliverables from them, using theextensive framework of monitoringinformation that has been implementedfor policies and business supportproducts.

2.34 Careful use of these leading indicatorscan show the expected scale andtrajectories for economic impact, as faras possible, which in many cases will beseveral years ahead. Impact estimateswill use currently available evidence,e.g. from evaluations of legacyprogrammes and the structuralinnovation system relationships revealedby innovation and R&D surveys.


2.35 The CIS is a postal survey of a sampleof business enterprises which collectsquantitative and qualitative informationon a range of innovation-relatedactivities as part of a survey carried outacross EU countries. It is undertaken bythe ONS, on behalf of DTI, currentlyfour-yearly, but the frequency is underreview.


23

Country 1988 1993 1998 1999 2000 2001 2002 2003

Canada 0.77 0.83 1.07 1.07 1.15 1.21 1.05 1.01

France 1.33 1.49 1.35 1.38 1.36 1.41 1.37 n/a

Germany 2.02 1.65 1.57 1.70 1.75 1.75 1.75 1.73

Italy 0.70 0.66 0.52 0.51 0.53 0.55 0.54 0.55

Japan 1.90 1.99 2.10 2.10 2.12 2.26 2.32 n/a

UK 1.40 1.33 1.17 1.23 1.19 1.23 1.24 1.23

US 1.92 1.78 1.94 1.98 2.04 2.00 1.87 1.81

OECD average 1.55 1.42 1.49 1.52 1.56 1.58 1.54 n/aSource: ONS for UK, OECD for rest

Business R&D as share of GDPFigure 2.5:

Country 1995 1996 1997 1998 1999 2000 2001 2002 20038 %increase

1995–2003

US 208.6 226.0 225.6 290.0 299.7 300.5 306.6 301.5 301.8 44.7%

Germany 80.9 83.6 85.5 111.1 114.2 124.8 136.9 137.1 138.8 71.4%

France 47.4 47.0 49.6 61.5 63.5 63.4 66.8 66.0 63.0 32.8%

UK 43.1 42.7 46.5 59.9 61.6 62.9 67.4 65.0 60.1 39.4%

Italy 19.1 20.9 21.9 27.8 26.1 29.5 29.8 30.3 29.6 55.2%Source: OECD Patent database and main science and technology indicators

Patent grants at the US Patent Office per million population7Figure 2.6:

7 The data is for the inventor’s country of origin8 2003 figures are based on estimated population figures

2.36 BERD data is collected from R&Dperforming companies by the ONSusing an annual survey.

2.37 Patent data is routinely supplied by thePatent Offices concerned andnormalised to country populations byDTI statisticians. Patents are routinelycollected official statistics.

Forward Look

2.38 This target is rolled forward in similarterms as SR2004 PSA target 2. Detailsof future plans in this area can be foundin Chapter 3 Science and Engineeringand Chapter 4 Knowledge Transfer andInnovation.

Competition

Current position

2.39 The 2004 Peer Review of the UKcompetition regime, carried out byKPMG, was published in May 2004.It showed that the UK competitionregime ranked third behind the US andGermany, but ahead of the EU and otherOECD countries – the same result as inthe 2001 review. It was felt that the UKregime now had all the tools in place

but that it would take more time torealise the full benefits of the EnterpriseAct 2002.

2.40 The UK merger regime was seen as thestrongest element, due to the capabilityof the staff involved and due to thepresence of more establishedprocesses (despite Enterprise Actchanges, a lot of the practices werealready followed). The non-mergerregime is rated lower, in part due to notdealing effectively with cartels.

2.41 About half of the survey respondentsdid not yet know how the EnterpriseAct had affected the UK competitionregime. However, amongst those thatdid express an opinion, nearly allbelieved it had enhanced the UKregime. There was a strong feeling thattime was needed for the new legislationto bed down and that any changesshould only focus on speed of decision-making and prioritisation of cases.

2.42 The Global Competition Review (GCR)enforcement survey 2004 ranked theUK joint third in the world behind the USand Germany. The UK regime waspraised for the skilfulness of its analysisbut it was felt that a significant result innon-merger work was needed. The UK’srating in this survey has dropped since2003; however, other countries alsoexperienced a fall in their ratings, so theUK’s relative position is unchanged apartfrom a lower ranking relative toGermany. The survey provides a usefulsecondary source to our own peerreview and it was reassuring to seesimilar messages coming out from bothsurveys.

Investigations

2.43 In 2004, the Government responded toOffice of Fair Trading (OFT) marketstudies on taxis, pharmacies, doorstepselling and estate agents. On residualFair Trading Act 1973 issues, DTI has

Place empowered consumers atthe heart of an effectivecompetition regime, bringing UKlevels of competition, consumerempowerment and protection upto the level of the best by 2006,measuring the effectiveness ofthe regime by peer review andother evidence, to ensure a fairdeal for consumers and businessworking in collaboration with therelevant regulatory agencies.

PSA Target 3


24

announced a decision on the code ofpractice for the newspaper distributionindustry and is consulting on legislativeproposals to implement the CompetitionCommission’s report on extendedwarranties. The OFT is also conductingan audit of compliance with thesupermarkets’ code of practice.

2.44 The OFT published its report on thedoorstep selling market study in May2004. The report identified a series ofoptions for improving consumerprotection. The Secretary of Stateresponded to the report and launched apublic consultation on these options inJuly 2004. The consultation ended on15 November 2004 and the results areexpected to be announced in 2005.

2.45 Further information about the work of the OFT and the CompetitionCommission can be found at:www.oft.gov.uk and www.competition-commission.org.uk.


2.46 The implementation of the EnterpriseAct has ensured that the weaknessesidentified in the 2001 Peer Review wereaddressed by the time of the 2004Review. However, as the 2004 Reviewwas conducted less than a year afterthe Enterprise Act was implemented,the full benefits have yet to be realised.

2.47 The next Peer Review will take placein 2006 and we expect to seeimprovements as a result of theEnterprise Act bedding down. In theinterim, we will monitor the results ofthe GCR enforcement survey, which isdue in mid-2005, and we will becollecting information as part of a longerterm plan to evaluate the effectivenessof both the Enterprise Act and theCompetition Act 1998.


Peer Review

2.48 The 2004 Peer Review of CompetitionPolicy regimes, carried out by KPMG,asked 215 experts from differentcountries to rank the effectiveness ofthe UK competition regime with itspeers. The survey ensures it onlycaptures competition “experts” througha question early on in the surveyalthough the restriction of the survey toexperts does result in a small samplesize. There were about 35 follow-upface-to-face interviews to capture morequalitative information about theperformance of the competition regime.

Consumers

Current position

International Comparisons

2.49 There is currently no establishedmethodology to accurately compare ourown performance to that of othercountries. For this reason, we areconducting a programme of researchto improve the evidence base.

2.50 However, we did carry out somequalitative research, which resulted inthe “Comparative Report on ConsumerPolicy Regimes” that was published inOctober 2003. The report suggestedthat the UK policy framework wasprobably amongst the best in terms ofconsumer rights with regard to: sale ofgoods and services; access to justicethrough small claims court procedures;maintaining product safety; providingconsumer advice; sponsoring consumeradvocacy at the policy-making level; andinvestigating markets that were notworking well for consumers.

2.51 However, it found that the UK appearedto be behind the best in respect of:its legal framework, which was notas wide reaching as some others;


25

its enforcement arrangements, whichwere fragmented; the use of marketintelligence; and the provision of adviceabout suitable traders.

2.52 In October 2004, the OECD ConsumerCommittee agreed UK proposals toexamine best practice in consumerregimes. This stream of work has startedwith an investigation into best practice inraising awareness and giving informationto consumers. This phase is due to cometo an end and report to the Committee in2005. In this way, we hope to be in aposition to further evaluate aspects ofthe UK’s regime and develop a cleareridea of where the UK consumer regimestands against its peers.

OFT survey

2.53 A survey commissioned by the OFT in2004, revealed that 58% of consumerssay they feel either very or fairly wellinformed of their rights, whilst 79% feelvery or fairly confident about using theirrights where they need to make acomplaint or return goods or services.

2.54 The OFT’s survey allows us to look atlevels of consumer empowerment(measured by how informed andconfident consumers feel) in the UK.Improvement in this can only help ourinternational standing.

2.55 The OFT survey found that many onlyfeel fairly well informed (49%), ratherthan very well informed (9%). When itcomes to consumers using their rights,survey results vary. The OFT surveyfound that 79% of consumersinterviewed claimed to be confidentabout using their rights (34% felt veryconfident and 45% fairly confident).These results are very similar to the lastsurvey that was conducted for the OFTin 2003.

2003 2004

Fairly well informed of their rights 50% 49%

Very well informed of their rights 7% 9%

Fairly confident about using their rights 43% 45%

Very confident about using their rights 33% 34%


2.56 Empowered consumers have a key roleto play in promoting competition. Thereare four strands to Government policy:

▼ A review of the consumer policyframework, with a view to makingrecommendations for its reform in thefirst half of 2005. The DTI issued aconsultation document on a ConsumerStrategy in July 2004. This consultationexercise ended on 31 October 2004,with further analysis of all contributionsprogressing from November onwardswith a view to publishing the Strategy inthe first half of 2005;

▼ Reform of the legislation on consumercredit to increase transparency andempower consumers to make informedchoices, and to make the frameworkfairer for both consumers andbusinesses. Statutory Instruments werelaid in autumn 2004;

▼ Continued progress on delivering“Consumer Direct,” which providesadvice and information via a helpline andwebsite that empower consumers tomake the right choices and place moreeffective pressure on businesses toimprove products and services; and

▼ Consumer Support Networks (CSNs).These will complement ConsumerDirect by taking referrals of complexcases, providing face-to-face adviceand support for vulnerable consumers.163 CSNs have been registered, coveringsome 91% of the GB population.


26

2.57 In addition, the Enterprise Act hasenhanced the powers of redress forconsumers and introduced a new super-complaints procedure, which givesconsumer bodies a formal means ofbringing consumer problems to theattention of the OFT and otherregulators. So far, three organisationshave been designated super-complaintstatus: Citizens Advice; the NationalConsumer Council; and the Consumers’Association. Even before designation,the OFT has received and responded toissues raised by these bodies as if theyhad super-complaint status, e.g. theCare Homes market study resulted froma super-complaint. Others are in thepipeline, which may lead to marketinvestigations. In addition, Energywatch,Watervoice, CAMRA, the ConsumerCouncil for Northern Ireland andPostwatch have applied for super-complaint status. The StatutoryInstrument to designate Energywatch isbeing drafted. (Note: DTI’s role is toconsider applications for super-complaint status, and then to designate.Any subsequent complaints are madeby the body to the OFT (or otherregulator); it is then up to them toconsider what action to take.)

Quality of the data systems used

Consumer Empowerment survey

2.58 The OFT survey was carried out by themarket research company Synovate inearly 2004. DTI contributed questionsfor the survey although OFT managedthe research. It was based on a sampleof 2,011 people, selected to representthe UK population as a whole. This wasa larger sample than the 2003 survey,but the results are comparable.

Forward Look

2.59 This target is rolled forward in similarterms as SR2004 PSA target 3. Detailsof future plans in this area can be foundin Chapter 9, Extending CompetitiveMarkets.

Ensure the UK ranks in the top three most

competitive energy markets in the EU

and G7

Overall progress

On course

Current position

Energy market competitiveness

2.60 In order to inform the measurement ofthe PSA target, a methodology hasbeen developed9 by Oxera on behalf ofDTI, based on indicators of energymarket liberalisation at each stage of thesupply chain (upstream, wholesalemarkets, network and retail) and applied

Ensure the UK ranks in the topthree most competitive energymarkets in the EU and G7 in eachyear, whilst on course to maintainenergy security, to achieve fuelpoverty objectives; and (Jointtarget with the Department forEnvironment, Food and RuralAffairs (Defra)) improve theenvironment and the sustainableuse of natural resources,including through the use ofenergy saving technologies, tohelp to reduce greenhouse gasemissions by 12.5% from 1990levels and moving towards a 20%reduction in carbon dioxideemissions by 2010.

PSA Target 4


27

9 The final report setting out the methodology is available at: www.dti.gov.uk/energy/gas_and_electricity/competitiveness_structure/oxera_report.pdf

to energy markets in the EU and G7.The methodology has also beenreviewed by independent energy marketexperts.

2.61 The latest report, published in October200410, suggests that in 2003 the UKhas maintained its position from 2001and 2002 as having the mostcompetitive gas and electricity market,and therefore the most competitiveoverall energy market in the EU and G7.

Energy prices

2.62 Effective competition is only one of thefactors influencing energy price levels ina given country. The level of naturalenergy resources within a country,government policy, environmentaltargets, and taxation are only some ofthe additional factors that need to betaken into account to explain pricelevels and movements. Thus, energyprices in different countries can indicatea relative advantage of one country overanother in terms of an important inputfactor in its economy.

2.63 UK gas prices: in 2003, UK industrialprices were second lowest in EU bothincluding and excluding taxes (lowest inG7 both excluding taxes and includingtaxes), where data are available;domestic prices are fourth lowest in EUexcluding taxes and second lowestincluding taxes (lowest in G7 bothexcluding and including taxes), wheredata are available. It should be borne inmind, however, that industrial data for2003 are only available for ninecountries and domestic data for 2003are only available for 11 countries at thispoint, and therefore these statistics aresubject to revision.

2.64 UK electricity prices: in 2003, UKindustrial prices were second lowest inEU both excluding and including taxes

(third lowest in G7 excluding taxes andsecond lowest including taxes), wheredata are available; domestic prices areseventh lowest in EU excluding taxesand third lowest including taxes (thirdlowest in G7 excluding taxes and lowestincluding taxes), where data areavailable. It should be borne in mind,however, that industrial data for 2003are only available for eight countries anddomestic electricity data for 2003 areonly available for ten countries at thispoint, and therefore these statistics aresubject to revision.

Secure and reliable supplies

2.65 The overall position on security ofsupply in the medium term is thesubject of regular reporting by the JointOfgem/DTI Energy Security of SupplyWorking Group (JESS). This group’s fifthreport was published in November 2004and shows that while gas supply maybe tight if demands reach exceptionallyhigh levels in the winters of 2004/05and 2005/06, ongoing and proposed gasimport infrastructure projects shouldmean a more comfortable supply-demand balance for gas after that.On the electricity side, the report showsthat the plant margin (ie the level ofcapacity relative to peak demand) isexpected to remain at or about presentlevels for the next 2-3 years. Thereafter,the electricity supply-demand balance isexpected to begin to tighten if no newgenerating capacity is built. However,proposals now being brought forwardfor the construction of such capacityprovide practical evidence to supportthe Government’s belief, as set out inthe White Paper, that a functioningliberalised market is capable of providingand responding to signals indicating theneed for more supply. We have alsoseen evidence that demand-side


28

10 Available at: www.dti.gov.uk/energy/gas_and_electricity/competitiveness_structure/psa_final.pdf

responsiveness has improved as largeconsumers curtail energy use at timesof high prices.

2.66 The winter of 2003/04 was generallymild (only 15% of winters are expectedto be warmer) and as a result maximumdemand for both gas and electricitywere both significantly lower thanexperienced in the previous winter.The potential shortfall betweengeneration and peak demand for winter2003/04 did not materialise because anumber of mothballed plants werereturned to service thus raising the plantmargin to 21.6%. Winter 2004/05 wasalso mild and no significant problems inthe balance of supply and demand havebeen experienced. The response of localdistribution network companies to thepower outages caused by extremeweather in early January suggest thatimproved arrangements for emergencyresponse put in place after the stormsof 2002 have been effective althoughDTI and Ofgem will consider whetherfurther lessons can be drawn from theexperience.

Fuel poverty

2.67 Progress against the Government’s fuelpoverty targets is published in anAnnual Progress Report11. The overalltarget is to seek an end to the problemof fuel poverty in England by 2016 andin particular to seek an end to fuelpoverty for vulnerable households inEngland by 2010. Recent progress is asfollows:

▼ The number of vulnerable households infuel poverty in England has fallen fromaround 3 million in 1996 to around1.2 million in 2002;

▼ The number of households in fuelpoverty in the UK has fallen by over3 million since 1996, down to around2.25 million in 2002.

2.68 The Government aims to publish its nextAnnual Progress Report in summer 2005.


2.69 The position in terms of energy prices inthe UK compared to the other nations inthe EU and G7 is likely to worsen from2004, with UK gas and electricity pricesrising faster than those in other EUcountries. For gas, both UK andEuropean wholesale prices haveincreased significantly due to rises inthe price of oil, to which the gas price iscontractually linked in Europe. However,in the UK, prices have risen further as aresult of the expected tightness of thesupply/demand position in the 2004/05gas year as the UK moves towardsbecoming a net importer. This tightnesshas led to nervousness and upwardprice pressure on the forward market,based on which industrial gas pricesare negotiated. Moreover, in the UK,gas suppliers have limited ability orincentives to absorb wholesale priceincreases, which therefore tend to getdirectly passed through to industrial(and eventually, domestic) user prices.The combination of these drivers –higher wholesale prices and faster pass-through – will mean that UK (industrial)gas prices are less competitive than inthe past.

2.70 Gas is also a substantial component ofthe UK fuel mix in electricity generationand therefore the gas price is probablythe largest factor behind recentelectricity price increases, but electricityprice increases also reflect the fact thatthe wholesale price had reachedhistorically low levels in 2002 leading to


29

11 The 2004 Annual Progress Report is available at www.defra.gov.uk/environment/energy/fuelpov/pdf/fuelpov_2nocover.pdf.

widespread business failures in theindustry. The marginal cost of carbondioxide emissions is also likely to befully passed through into forwardelectricity prices in the UK, whileforward electricity prices in othercountries – for various structural andpolitical reasons – do not appear fully toincorporate the marginal costs of carbondioxide allowances and therefore maynot increase prices in those countries tothe same extent as in the UK. Someprice increases in the UK are alsoinevitable as a market signal for theneed for additional generation capacityin the future. This is the market workingto ensure diversity of supplies.

2.71 The impact of higher energy prices onfuel poverty, and limited funding forenergy efficiency from Spending Review2004, is likely to make it more difficultfor Government to meet its fuel povertytargets. We have looked at theimplications of the energy priceincreases on the numbers in fuel povertyand have estimated that price andincome movements are likely to increasethe number of vulnerable households infuel poverty by 200,000 between 2003and 2005. In the longer term, though,we estimate that incomes and pricemovements will actually reduce thenumber of people in fuel poverty by300,000 relative to the 2002 level.

2.72 JESS envisages a tightness betweengas supply and demand in winter2005/06 based on a theoreticalmaximum level of demand. However,recent work had shown that there wassome evidence from winter 2003/04 ofdemand side response to high gasprices that arose at peak periods. Risingforward annual baseload prices in therun up to winter 2005/06 have led to noreductions in the generating capacityavailable for winter 2004/05.


2.73 International price data are derived fromthe International Energy Agencystatistical publication “Energy Prices andTaxes.” Data for 2003 are not availablefor several countries. This analysis isbased on the available data. Furtherdetails on methodology are available in“Energy Prices and Taxes.”

2.74 Fuel poverty data are provided by theEnglish House Condition Survey (EHCS)which will be conducted on a continuous“rolling basis” from 2002. Results for2002 are derived from projecting forwardchanges in energy prices, incomes andenergy efficiency from the 2001 EHCS,which had a sample of 17,500households. This is a major Office of theDeputy Prime Minister (ODPM)household survey that is undertaken toassess the condition of the stock and itsimprovement, and how poor conditionsare distributed across different types ofdwellings, households and areas.

Improve the environment and the

sustainable use of natural resources, to

help to reduce greenhouse gas emissions

Overall progress

2.75 There are essentially two elements here:

▼ The Kyoto target to reduce greenhousegas emissions by 12.5%. We are on

track to meet and move beyond theKyoto target. The latest forecastsuggests the reduction will be 21% by2010; and

▼ To move towards the domestic goal

to reduce carbon dioxide emissions by20%. We currently have a reduction of5.6%. Our forecast is that by 2010 –before allowance for the EU EmissionsTrading Scheme (EUETS) – the reductionwill be 14%. The Climate ChangeProgramme Review (CCPR) will evaluatemeasures to take us closer to the goal.


30

Current position

Sustainable use of natural resources

2.76 The target for the UK is to reduce theamount of industrial and commercialwaste going to landfill to 85% of 1998levels by 2005, as set out in the UKWaste Strategy12. The EnvironmentAgency carried out a survey whichlooked at the total amount of industrialand commercial waste going to landfillin 1998/99. Data for the next survey arecurrently being collected, and should beavailable by summer 2005.

2.77 Annual data on industrial andcommercial waste sent to licensedlandfill sites are also available and arecollected by the Environment Agency.The latest data from the landfill sitereturns show a reduction in industrialand commercial waste to landfill of 8%13

between 1998/99 and 2000/01. So,tentatively, this target is on course to bemet, but this is still subject toconfirmation of the data.

Greenhouse gas emissions

2.78 The UK’s target under the KyotoProtocol is to reduce greenhouse gasemissions in 2008 by 12 – 12.5% frombaseline levels. The baseline is currentlycalculated to be 209 million tonnes ofcarbon (MtC); this represents emissionsof carbon dioxide, methane and nitrousoxides during 1990, together withhydrofluorocarbon, perfluorocarbon andsulphur hexafluoride emissions during1995. These gases are converted intoan equivalent amount of carbon, basedon their relative impact towards globalwarming. In 2002, greenhouse gasemissions were about 15% below thebaseline. Provisional estimates forgreenhouse gas emissions in 2003indicate a fall of about 14% from the

baseline. Updated figures for 2003 willbe available at the end of March 2005.Thus the target is considered to be oncourse.

Carbon dioxide emissions

2.79 The national goal is to move towards a20% reduction in carbon dioxideemissions by 2010. The baseline istaken from the 1990 level of carbondioxide emissions, when emissionswere around 165 MtC. In 2002,emissions of carbon dioxide werearound 8% below 1990 levels.Estimates for 2003 indicate thatemissions were about 2.2% higher thanin 2002, and 5.6% below 1990 levels.This increase in carbon dioxideemissions between 2002 and 2003 isdue to short-term factors, includinggreater consumption of coal relative togas as a result of higher gas prices, adecrease in net imports of electricityand an increase in demand for electricitymainly in the commercial, public anddomestic sectors.

Short summary of progress

2.80 Total greenhouse gas emissions in theUK in 2002 were 14.4% below theagreed baseline levels. Since 1990:

▼ carbon dioxide emissions fell by about7.7%;

▼ methane emissions fell by about 43%;and

▼ nitrous oxide emissions fell by about40%.

2.81 The UK has decided to use 1995 ratherthan 1990 as the base year foremissions of fluorinated gases inaccordance with the provisions of theKyoto Protocol, because the data ismore reliable. Between 1995 and 2002:


31

12 Available at: www.defra.gov.uk/environment/waste/strategy/cm4693/index.htm13 Industrial & commercial waste to open gate and restricted user landfill sites, excluding the North West region for which there is no breakdown

between municipal and industrial & commercial waste data in 1998/99.

▼ hydrofluorocarbon (HFC) emissions fellby 33%;

▼ perfluorocarbon (PFC) emissions fell by16%; and

▼ sulphur hexafluoride (SF6) emissionsincreased by 23%.

2.82 Latest forecasts suggest that thereduction in greenhouse gases will be21% in 2010 relative to baseline levels.


2.83 Some annual variation in emissions, ofcarbon dioxide in particular, is expected,not least because of externaltemperature effects and short runchanges in the fuel mix in the electricitysupply industry. The provisional increasein carbon dioxide emissions between2002 and 2003 – of around 2.2% – isnot expected to change the direction ofthe overall downward trend in the UK’scarbon dioxide emissions.

2.84 DTI works closely with Defra to deliverthis target, holding regular meetings todevelop and monitor coordinateddelivery plans. The UK Climate ChangeProgramme contains a strong packageof policies and measures to helpachieve the greenhouse gas and carbondioxide targets. A review of the ClimateChange Programme is due to becompleted during 2005. The review willprovide a comprehensive assessment ofthe progress made since theprogramme was published anddetermine whether we are still on tracktowards meeting the 2010 carbondioxide domestic goal.


2.85 Emissions data are calculated by theNational Environmental TechnologyCentre (NETCEN) on behalf of Defra.Emissions are estimated by applying anemission factor to activity data (in many

cases this can be energy consumptiondata, but can also be the bank of fluidheld in products and equipment (in thecase of HFCs, PFCs and SF6) or datasupplied from industry returns).

2.86 Analysis by NETCEN indicates thatuncertainties in carbon dioxideemissions estimates are +/- 2%, and foremissions of the ‘basket’ of sixgreenhouse gases weighted by globalwarming potential are about +/- 15%.

2.87 Although for any given yearconsiderable uncertainties can surroundthe emission estimates for a givenpollutant, trends over time are likely tobe more reliable. UK national emissionestimates are updated annually and anydevelopments in methodology areapplied retrospectively to earlier years.Adjustments in the methodology aremade to accommodate new technicalinformation and to improve internationalcomparability.

Forward Look

2.88 The CCPR is currently underway. Thiswill establish how much more we haveto do to meet our targets and willrecommend policy changes to help usget there.

2.89 From April 2005, the Department forTransport adopted shared responsibilityfor this PSA target with Defra and DTI.The three departments are currently inthe process of drafting a delivery planthat will help to monitor and progressdelivery. Our aim is to produce ashorter, more focused plan that can beeasily revised after the CCPR.

2.90 This target is rolled forward in similarterms as SR2004 PSA target 4. Detailsof future plans in this area can be foundin Chapter 12 ‘Sustainability and theEnvironment’ and Chapter 13 ‘Securityof Energy Supply’.


32

Overall progress

Slippage

Current position

2.91 After the failure of the Fifth World TradeOrganisation (WTO) Ministerial meetingin Cancun in September 2003 there wasno likelihood of the Doha DevelopmentAgenda (DDA) being completed by 1January 2005, so the original target(always challenging) was unachievable.But, the conclusion of a frameworkagreement in Geneva in July 2004increases the prospect of the DDAbeing successfully completed, albeitlater than originally planned.

2.92 This framework agreement marks asignificant step forward. There nowneeds to be considerable technical workif the next Ministerial meeting(December 2005) is to make furthersubstantial progress towards a rapid andsuccessful conclusion of the DohaRound.


2.93 The UK cannot deliver this target alone.It has to make its contribution througheffective influencing within the EU andWTO. As part of this process, the UK

published a White Paper14 in July 2004,which sets out a vision of a worldtrading system which is fair as well asfree, and lays down a series ofchallenges which the UK, the EU andthe international community must riseto if that vision is to be translated intoreality. The rejection of the mercantilistapproach to trade negotiations, therecognition of the opportunities thattrade represents, the need for properlysequenced reform and supply sidecapacity building in developingcountries, as well as transitionalassistance to support these countriesare all elements of that challenge.

2.94 The UK gave strong encouragement tothe European Commission to showleadership after the failure of theCancun Ministerial, and with someother WTO Members worked hard toreinvigorate the negotiating process.A joint letter from Commissioners Lamyand Fischler, spelling out in more detailhow much further the EU was preparedto move on agriculture if others did, andwhat exceptions should be made forweak and vulnerable countries did muchto improve the atmosphere.

2.95 DfID funded meetings of the so-calledG90 – the emerging group of leastdeveloped countries, the African Union,and the African, Caribbean and Pacificgrouping – to help them refine theirnegotiating position and explore theirnegotiating flexibilities. Intensive behindthe scenes discussions prior to andduring the General Council meeting inJuly, where DTI and Defra in particularworked hard to support the Commissionand ensure some other Member Statesdid not row back on the Commission’sproffered commitment, were a keyfactor in ensuring the frameworkagreement.

Secure agreement by 2005 to asignificant reduction in tradebarriers leading to improvedtrading opportunities for the UKand developing countries. (Jointtarget with the Department forInternational Development (DfID)and the Foreign andCommonwealth Office (FCO))

PSA Target 5


33

14 www.dti.gov.uk/ewt/whitepaper.htm

2.96 The DTI established a new regular inter-departmental group after Cancun toimprove planning and operations. Thishas resulted in an improved inter-departmental influencing strategy toensure each department builds on itscomparative advantage to maximise theUK’s impact in influencing key actors.DfID’s International Trade Departmenthas re-prioritised its activities to focuson the issues that could threaten apositive development to the WTOround. This includes a more proactiveapproach to disseminating qualityresearch and analysis early enough forthe UK to influence policy formulation inBrussels and more widely. The FCO isincreasing its analytical resources ontrade, and works in close co-operationwith other Departments on theirdelivery plans.

2.97 Trade will remain a key DTI objective for2005, when the UK will hold both EUand G8 Presidencies. DfID and DTI areembarking on a joint exercise toimprove the planning, focus andoutcomes of their respective deliveryplans.


2.98 Not applicable – performance judged onqualitative assessment of progress.

Forward Look

2.99 This target is rolled forward in similarterms as SR2004 PSA target 5. Detailsof future plans in this area can be foundin Chapter 9 Extending CompetitiveMarkets.

Overall progress

Slippage

(i) An increase in the number of people

considering going into business

Current position

2.100 Slippage. The percentage of adultsconsidering going into business was11.6% in 2001 and 11.3% in 2003, withno improvement towards the 14%target level set for 200515.


2.101Supporting information from the GlobalEntrepreneurship Monitor (GEM) foundthat between 2001 and 2002, there wasa 30% reduction in total entrepreneurialactivity (TEA16) across the world,arguably the effects of the World TradeCenter disaster and subsequent globalrecession, and UK TEA fell from 7.7% in2001 to 5.4% in 2002. It recovered to6.4% for 2003 and, practicallyunchanged at 6.3% in 2004, is the thirdhighest in G8. However this is stillbelow the 2001 level, mirroring theoverall fall in business confidence andactivity between 2001 and 2003.

Help to build an enterprisesociety in which small firms of allkinds thrive and achieve theirpotential with (i) an increase inthe number of peopleconsidering going into business,(ii) an improvement in the overallproductivity of small firms, and(iii) more enterprise indisadvantaged communities.

PSA Target 6


34

15 Although the slight fall seen between 2001 and 2003 is not statistically significant, and therefore the proportion may actually be unchanged, there isno evidence of an improvement towards the 2005 target level.

16 TEA measures the proportion of the adult population involved in nascent (start-up) businesses and in new businesses which have been operating forup to 42 months.


2.102The data for this PSA measure comesfrom the Small Business Service (SBS)Household Survey of Entrepreneurship,managed by the SBS Analytical Unit.In 2001, 6,000 adults in England wereinterviewed via the telephone by anexternal research organisation (IFFresearch). In 2003, the research wasconducted by NOP, and the sample wasexpanded to 10,000 adults in England.Results are weighted to reflect the adultpopulation in England, using Censusdata. It is not a National Statisticsproduct. Since the survey is a samplesurvey, results are subject to margins oferror. Therefore, the target level for2005 has been set at 14% – a levelwhich, if achieved, would reflect astatistically significant increase in theproportion of adults considering goinginto business.

(ii) An improvement in the overall

productivity of small firms

Current position

2.103On course. Small firms’ productivity(gross value added per employee)increased by 3.5% between 2001 and2002 in the UK. All firms’ productivityincreased by 2.9%. This is the third yearrunning that small firms’ productivitygrowth has exceeded all firms’productivity growth (although the rate ofgrowth has slowed down) and the gapbetween small and all firms hasnarrowed since the previous year.In 1999, small firms were 93% asproductive as large firms, and this figurehas increased over time to 96% asproductive in 2002.


2.104 In 2002, there was a slowing down ofUK productivity growth (output perworker), which has impacted on bothsmall firms and large firms.


2.105Productivity is measured using datafrom the ONS Annual Business Inquiry(ABI)17. This is a National Statisticsproduct. The ABI is a large-scale annualsurvey of around 70,000 registeredbusinesses in the UK, conducted in twoparts – financial and employment.Businesses with more than 250employees are surveyed every year,with smaller businesses surveyed lessfrequently to reduce administrativeburden on small firms. As with anysample survey, there will be samplingerrors around any estimates from theABI. However, sampling errors are smallfor the aggregates of the main ABIvariables such as Gross Value Added(GVA) and employees, and indeed thesample is specifically designed toachieve this18.

(iii) More enterprise in disadvantaged

communities

Current position

2.106Slippage. In 2003, there were 29 VATregistrations per 10,000 resident adultsin the 20% most deprived areas inEngland, compared to 46 VATregistrations per 10,000 resident adultsin the 20% least deprived areas. This isa gap of 37%.

2.107There was progress between 2002 and2003 and (especially) between 2000 and2001, but a reverse between 2001 and


35

17 www.statistics.gov.uk/abi18 The financial inquiry covers around two thirds of the UK economy. The coverage of the employment inquiry is wider. Therefore the productivity

measure, which combines data from the two inquiries, excludes some sectors such as financial intermediation, health and education, where a GVAper employee measure is not available. Around a quarter of the businesses covered by the measure are in the primary, production and constructionsectors, and the remaining three-quarters are in services (based on 2002 data). Since exactly the same sectors are excluded from the measure forboth small and large businesses, the conclusions about relative changes in productivity over time are unaffected.

2002 means that overall progress (areduction in the gap of 2.1 percentagepoints) is less than the 3.0 required.


2.108The widening of the gap between 2001and 2002 was due to an increase in VATregistration rates in the least deprivedareas. Overall, 2000 to 2003, VATregistration rates in the most deprivedareas have increased, but because ratesin the least deprived areas haveincreased too, the gap has not closed byas much as the target requires.

2.109Because businesses are not compelledto register for VAT until their turnoverreaches the VAT threshold (currently£58,000), this measure does not captureall enterprise activity. While somebusinesses will register for VAT as soonas they start, others may not register forseveral years. Therefore for 2005 –2008, enterprise in disadvantagedcommunities will be measured byself-employment in deprived wards,

as described in the Spending Review2004 technical note atwww.dti.gov.uk/psa_target.html.


2.110Three data sources are used to producethis measure:

▼ VAT registrations – estimates producedby the SBS19 based on the ONS Inter-Departmental Business Register(IDBR)20, released as National Statistics;

▼ Adult population – all people aged 16and over – estimates produced by theONS (mid-1998 estimates), as NationalStatistics; and

▼ The ODPM Index of MultipleDeprivation 200421 – used to identify themost and least deprived areas inEngland.

Change in data systems

2.111The original target was set using theIndex of Multiple Deprivation 2000. ThisIndex is only available for England and is


36

0

1

2

3

4

5

2001–20022000–20011999–2000

SMEs All firms

%

Productivity growth (basic prices) by size of enterprise, 1999–2002Figure 2.7:

19 www.sbs.gov.uk/analytical/statistics/vatstats.php 20 www.statistics.gov.uk/idbr 21 www.odpm.gov.uk/indices

based upon 1998 wards, which are nolonger held on the IDBR. The measurenow uses the Index of MultipleDeprivation 2004. This Index is basedupon Super Output Areas, which areheld on the IDBR.

Forward Look

2.112This target is rolled forward in similarterms as SR2004 PSA target 6 (althoughthe measure for PSA 6(iii) will use self-employment instead of VATregistrations, as described above).Details of future plans in this area canbe found in Chapter 5 Enterprise,Growth and Business Investment.


37

Year Most deprived Least deprived Gap in rates Annual change Total changein gap in gap

2000 25.5 42.0 39.2%

2001 25.5 39.3 35.1% -4.1% points

2002 26.5 42.3 37.5% +2.4% points -1.7 points

2003 28.9 45.9 37.0% -0.5% points -2.1% points

VAT registration rates (registrations per 10,000 adults)Figure 2.8:


38

Related target

CSR 1998 PSA 4: To secure an increase in the number of high growth business start-ups.

Overall progressOn course

Current positionProvisional data for 2000 shows that of the businesses which registered in 2000, 12,400 canbe defined as high-growth start-ups. After a decline in the number of high-growth start-upsover the period 1994 to 1996, the number of high-growth start-ups has increased again, andprovisional figures for 2000 show a slight increase on 1999 levels.


Progress towards this target is assessed by estimating the number of VAT registered firmswith a turnover of over £1 million and/or ten or more employees four years after registering forVAT. Over the whole period, around 7% of all new VAT registrations become high-growth start-ups. There has been little change in this proportion over time.

The increase in high-growth start-ups over the period has been focused in just one sector –business services – which accounted for over three in ten high-growth start-ups in 2000.Decreasing levels of high-growth start-ups have been seen in Manufacturing and Wholesale, Retail and Repairs, two sectors which collectively accounted for four in ten high-growth start-ups in1994, and are therefore key contributors. All other sectors have seen very little change since 1994.


Data is from the IDBR, which is maintained by the ONS.

0

2000

4000

6000

8000

10000

12000

14000

2000

(provisional)

199919981997199619951994

Number of high-growth start-ups in the UK, by year of start-up (VAT registration)

Overall progress

On course.

Current position

2.113The headline measure for this PSAtarget is the trend rate of growth in GVAper head. Trend growth for the baseline1989 – 2002 period, for individualregions and for the top three and bottomsix regions, is available on the ODPM,DTI and HM Treasury websites22.The gap in the growth rates will bemeasured by comparing the averagegrowth rate of regions that currentlyhave above average GVA per head (topthree regions) with the regions thatcurrently have below average GVA perhead (bottom six regions). Thismeasurement involves comparingaverage growth for London, South Eastand East with average growth for NorthEast, North West, Yorkshire and theHumber, West Midlands, East Midlandsand South West, weighted bypopulation. Measurement of trend ratesof growth per head will use a similarmethodology to that used by HMTreasury to estimate national trend GDPgrowth i.e. by calculating averagegrowth rates between points when thenational economy can be identified as

being ‘on trend’. For the baseline period,this involves looking at average growthbetween 1990/91 and 2001. As thebaseline data shows that trend growth inthe three leading regions (in cash terms)was 5.2%, and 4.7% in the six laggingregions, the gap in growth rates is 0.5percentage points.

2.114As well as comparing the growth ratesbetween these aggregations of regions,growth rates for individual regions will alsobe monitored to ensure that the part ofthe target that requires the performanceof all regions to improve is being met.

2.115Supporting indicators, includingbusiness surveys, employmentstatistics, unemployment rates, earningsgrowth, VAT registrations, and otherindicators of the performance of the fivedrivers of productivity, are available tomonitor performance, and will informupdates of performance, at six-monthlyintervals. Improvements in the majorityof these indicators (taking into accountcyclical influences) will be considered asevidence that progress is on track. Anoverall assessment of progress will alsobe made in 2006 with the latest data forGVA and other indicators then available.Where the indicators are not NationalStatistics, the indicators will be checkedinternally and agreed between the threeDepartments. A suite of indicators totrack progress on the PSA are availableat www.rcu.gov.uk/reppsa.


2.116Significant progress has been madewith delivery of the Regional EconomicPerformance (REP) PSA over the pastyear:

▼ The identification of key measuresto improve regional economicperformance, based around the keydrivers of economic growth –

To make sustainableimprovements in the economicperformance of all Englishregions and over the long termreduce the persistent gap ingrowth rates between theregions, defining measures toimprove performance andreporting progress against thesemeasures by 2006. (Joint withHM Treasury and ODPM)

PSA Target 7


39

22 www.odpm.gov.uk, www.dti.gov.uk, www.hm-treasury.gov.uk

employment, skills, innovation,enterprise, investment and competition.These measures were published in theTechnical Note for the PSA in July 2004which can be viewed on the ODPM, DTIand HM Treasury websites;

▼ The publication of a summary of thebackground research by FrontierEconomics that underpinned the workto develop these measures, which canbe viewed on the regional overviewsection of the ODPM website;

▼ The publication, at the SustainableCommunities Summit on 1st Februrary2005, of Realising the Potential of AllOur Regions: the way forward whichsets out how the Government andRDAs are working together to deliverthe REP PSA. Realising the Potential ofAll Our Regions: the story so far, whichdescribes the measures already in placein more detail, is available on the ODPMwebsite.

▼ The establishment of threedemonstration projects to deliver someof the key PSA policy propositions on:addressing inactivity in the North East,especially amongst the sick anddisabled; encouraging enterprise in theNorth West; and improving skills inYorkshire and Humberside.

▼ The Secretaries of State for Educationand Skills, for Transport, and for Workand Pensions have set out theircommitment to seek to: reduce regionalskills disparities; narrow regionaldisparities in employment rates; andensure that our transport system fullysupports improved regional economicperformance.

2.117 It is early days in the delivery of thePSA, but already we have:

▼ Announced that we will match fund theRDAs’ contribution to create a £100million Northern Way Investment Fund

to help close a £29 billion productivitygap with the rest of the country. Thiswas alongside the publication of MovingForward: The Northern Way on 20September 2004. Smart Growth: TheMidlands Way and The Way Ahead:Delivering sustainable communities inthe South West were both publishedby the RDAs for those regions inJanuary 2005;

▼ Devolved responsibility to the RDAs forthe delivery of Business Link services,R&D grants, business university linksand promoting enterprise indisadvantaged areas from April 2005;

▼ Given the RDAs substantial fundingflexibility to allow them to respond toregional priorities and increasing theirfunding from £1.6 billion in 2002/03 to£2.3 billion in 2007/08;

▼ Will be investing £11 billion per year by2007/8 on post 16 education and skills(excluding Higher Education) across theEnglish regions and enabling the RDAChief Executive and Regional LearningSkills Council Director in each region toadopt joint budgeting and planning ofthe adult skills budget, where they wantit. (In the three Northern regions, this isworth £634 million in 2004/05);

▼ Announced that the Government willexamine new ways to integratetransport, economic and spatialdevelopment strategies in each region,within a framework of indicative fundingallocations for each region; and

▼ Announced an expansion to thePathways to Work pilots – an initiativeto help people on Incapacity Benefit intowork.

2.118The target period started 1 January2003. In general, it is too early and thereis too little data on the GVA or key


40

drivers of economic growth to drawconclusions on movements or trends.However, early indications are that:

▼ Unemployment is decreasing andemployment rates are up in the North;

▼ The North, Midlands and South West allsaw increases in business start uprates, and general entrepreneurialactivity has risen;

▼ Northern service sector firms haveincreased their operating rate; and

▼ The number of pupils with 5+ GCSE hasincreased in all regions.

Quality of data systems

2.119To measure performance against theregional economic performance targetthe trend rate of growth in GVA perhead in each region will be estimatedfor the period 2003-08. The gap ingrowth rates will be measured bycomparing the average growth rate ofregions that currently have aboveaverage GVA per head with the averagegrowth rate of regions that currentlyhave below average GVA per head.Annual GVA per head data for eachregion is only available after a 12-monthlag so performance against this targetwill be reported in 2010.

2.120The publication in March 2004 of‘Productivity in the UK 5: BenchmarkingUK productivity performance’ proposedthe publication of a suite of national andregional productivity indicators to helpkeep track of delivery of the PSA. TheGovernment response was published inOctober 2004 and a suite of indicatorsare now available atwww.rcu.gov.uk/reppsa.

2.121Christopher Allsopp was commissionedto carry out an independent review ofthe regional information and statisticalframework needed to support theGovernment’s objective of promoting

economic growth in all the regions andreducing the persistent gap in growthrates between the regions. The AllsoppReview issued its final report in March2004 and made a number ofrecommendations accepted by theGovernment. In response, the ONS will,beginning with new surveys in 2006,deliver reliable baseline GVA estimatesby region, a framework that betterreflects economic diversity and change,and put statisticians in every region byMarch 2007 to strengthen links withdevolved administrations and regionalbodies.

Forward Look

2.122This target is rolled forward in similarterms as SR2004 PSA target 7. Detailsof future plans in this area can be foundin Chapter 6, Strengthening RegionalEconomies.

Overall progress

On course

ICT Take-up and Use

Current position

2.123The UK is placed third for its take-upand use by business, as measured bythe Sophistication Index of theInternational Benchmarking Study (IBS)

Make the UK the best place in theworld for e-business, with anextensive and competitivebroadband market, judged usinginternational comparativemeasures of business uptake anduse of information andcommunication techniques.

PSA Target 8


41

2004. UK is almost level with second-placed Ireland and close behind theleaders, Sweden.

2.124The IBS 2004 shows relatively strongtrends of increasing Information andCommunication Technologies (ICT)sophistication across many indicators.More businesses have connected to theinternet through broadband; there isgreater use of external e-mail; the UK isamongst the leaders in the adoption ofnew technologies, such as Voice over IPand desktop video conferencing; andbusinesses are paying for goods andservices online more often. UKbusinesses continue to have a positiveattitude towards technology adoptionand are among the most likely to have awritten business plan and documentedICT strategy.

2.125The digital divide affecting micro andsmall businesses, which had opened upin previous years, appears to have nowclosed considerably, according to latestIBS findings.

2.126Challenges remain, however, with theUK performing less well than othercountries in a number of aspects oftrading online. Businesses in othercountries also appear to believe thatthey achieve more benefits from theiruse of ICT than UK businesses.


2.127 In the UK, and globally too, some newtrends in ICT take-up and use appear tobe emerging. Businesses are becomingincreasingly selective in theirdeployment of ICT. The IBS 2004 showsthat the proportion of businesses thatmeasure the benefits of ICT has risensignificantly, with the focus now beingplaced on those areas that affect thebottom line. It no longer appears to be

ICT for ICT’s sake; the discriminatingapplication of ICT has become thedominant theme.

2.128Broadband has clearly become anattractive technology to businessthrough its wider availability and morecompetitive pricing. The proportion ofbusinesses connected to xDSLtechnology has almost doubled sincelast year and, overall, almost 70% ofbusinesses now have a broadbandconnection.

2.129Businesses therefore seem to beapproaching their ICT adoption anddeployment more maturely. Set up andrunning costs, though, remain the majorbarriers to implementing ICT, while thebiggest drivers are increased efficiencyand customer communication.

2.130As in other countries, more UKbusinesses place orders online thanaccept them. While there has been anincrease in both placing and acceptingorders online according to the IBS, it isclear that businesses continue tobelieve that trading online benefitsbuyers rather than suppliers.


2.131The IBS benchmarks businesses in theUK against G7 countries (Canada,France, Germany, Italy, Japan and theUS), as well as Australia, the Republicof Ireland, Sweden and South Korea.G7 countries are used as a benchmarkbecause they are all leading worldeconomies and countries such asAustralia, the Republic of Ireland,Sweden and South Korea are includedfor their regional importance and theirsophisticated use of ICT by business.

2.132 Hence, in the context of the target,“the world” is defined as UK, the US,Canada, Italy, Japan, France and Germany(G7) plus the Republic of Ireland,Australia, Sweden and South Korea.


42

2.133For the second year running, the IBS2004 has been a collaboration betweenBooz Allen Hamilton, HI Europe and theDTI. The study’s Sophistication Indexhas been further developed this year inan attempt to capture better the deeper,more integrated ways that businessesare using ICT. The index is based on amatrix which measures activity relatingto two established measurementapproaches – the ‘TechnologyInnovation Lifecycle Approach’, coveringAwareness, Adoption, Deployment andImpact, and the ‘Three Pillars Approach’which looks at People, Process andTechnology (and additionally,Environment). The index comprises asub-set of the indicators tracked by thesurvey (50 in the sub-set), selected onthe basis that they illustrate someaspect of ICT sophistication.

Broadband

Current position

2.134The latest report for autumn 2004shows the UK reached the position ofhaving the most extensive broadbandmarket in the G7 during the third quarterof 2004. The report also shows the UKremains third (close to second) oncompetitiveness.

2.135Both availability and take-up continue togrow. More than 96% of householdshave access to at least one affordablebroadband service, prices are continuingto fall and there are now more than 6million subscribers (consumer andbusiness). Levels of market growth inmany other markets internationally arealso high but indications are that UKentry-level market is at least keepingpace.23


2.136The strong lead shown by the DTI,RDAs and devolved administrations,as well as a wide range of communitygroups and local authorities, coupledwith a rapid growth in take-up haveresulted in BT becoming convinced thatdemand is sufficient to ensurebroadband coverage can be extendedto some 99.6% of population by 2005.

2.137Meanwhile there is stiff competition atthe retail level which has driven downprices and increased choice forconsumers. Ofcom’s work on thewholesale broadband markets and theapparent willingness of operators toinvest in local loop unbundling orwireless services indicate increasedcompetition in the wholesale market.Similarly the prospect of new broadbandvoice and video services point to a moresophisticated market developing.


2.138Ovum won a competitive tenderprocess in late 2004 for the contract forbroadband market metrics. In producingits first report Ovum has used the sameapproach as Analysys, who held thecontract between 2001 and 2004.

Forward Look

2.139This target is taken forward in SR2004as a Standard. Details of future plans inthis area can be found in Chapter 8Effective Channels with Business.


43

23 Further information on broadband can be found in Chapter 8 ‘Effective channels with Business’).

Overall progress

Outcomes have been mixed.

Current Position

2.140This is a cross cutting target for whichmuch of the delivery rests with otherGovernment Departments.

2.141There are eight measurable indicatorsfor this target. According to most recentdata four of the indicators are on courseto be met, three are showing slippageand one is not yet assessed. Thecurrent position for each indicator is setout in the summary table.

Factors affecting Performance

Monitoring

2.142The Women and Equality Unit (WEU) isclosely monitoring progress, and hasidentified areas of potential concern andis actively seeking to tackle this throughincreased cross-Government working toadd value and through the developmentof Internal Action Plans.

2.143A cross-Government Gender EqualitySteering Group has been set up by theWEU comprising high-levelrepresentatives, together withpractitioners dealing with gender issuesacross Government to monitor andreview the progress of the GenderEquality PSA. Recently a meeting forthe Steering Group was held by WEUwhere remedial solutions to thepossible risks to the delivery of theGender PSA were explored.

2.144There has been development ofa progress report to form part ofmonitoring measures used by DTI totrack performance of PSA 9 and providea tool for achieving accountability andtransparency in the workings of theDepartment.

By 2006, working with alldepartments, bring aboutmeasurable improvements ingender equality across a rangeof indicators, as part of theGovernment’s objectives onequality and social inclusion.

PSA Target 9


44

Related Target

SR 2000 PSA 3: Make and keep the UK the best place in the world to trade electronically,

as measured by the cost of Internet access and the extent of business-to-business and

business to consumer transactions carried out over e-commerce networks.

Final assessment: NOT MET

This target was established when eCommerce was in its infancy and how business woulduse the technology was not fully understood. In the event, we found that many companieschose not to use the technology to trade online, but in other ways such as improving internalprocesses, or using within the supply chain. As a result the target lost its relevance andwe developed a new target, SR 2002 PSA 8. This target captured the more diverse, andsophisticated, use of ICT within businesses, that reflected the way in which businesses wereusing ICT within their organisations and was more responsive to changes in the market.

Sub-target 1: Flexible working

2.145There has been improvement in theawareness of employees as to theright to request flexible workingarrangements. There were 800,000

requests granted in the first year, whichsuggests the legislation is working foremployers and eligible parents.

2.146The latest outturn for employeeawareness of flexible working optionsis 53%, an increase from the 2003


45

Sub-Target Target Baseline Latest Out-turn Assessment

Not yet

assessed

N/AIncrease frombaseline

58%(2003/04)

8 Domestic Violence –

percentage of

incidents with a

power of arrest where

an arrest was made

On course1997-2004 – 1 million placescreated

250,000 newplaces p.a.

185,374(2002)

7 Childcare

Slippage32% (2003/04)(NB this represents an increaseon the 30.7% out-turn in 2002/03)

34%(2001/02)

6 Judicial

Appointments

24.4% April 2004)25% 22.9% (April 2003)

(ii) Women in topmanagement posts

Slippage

27.8% (April 2004)35% 26.4%(April 2003)

5 Senior Civil Service

(SCS)

(i) Women in SCS

On course35.7% (2003)40% 34% (2002)4 Public bodies

20% (2003)Increase frombaseline

23% (2002)(iii) Women in ITEC

31% (6 months to October 2004)40% 25.8%(2002/03)

(ii) Business Link users

Slippage

Not expected to be met by 2005,target rolled forward to 2008

40% 23% (2003)

3 Under-represented

sectors

(i) Women in SET

On course45% of large employers shouldhave completed/be in the processof conducting an EPR by end2004 (November 2003 survey)

35% 18% (2003)2 Equal pay reviews

(EPRs)

First findings to be publishedMarch 2005

(50% 44% (2003)b) Employer provision

On course

53% (April 2004)56% 52% (2003)

1 Flexible working

(a) Employeeawareness

PSA 9 Gender Equality indicators – progress summary tableFigure 2.9:

baseline figure. The target for 2006 is56%. Data on employer provision offlexible working arrangements will bepublished in July 2005.

Sub-target 2: Equal Pay Reviews

2.147 In October 2003, the EqualOpportunities Commission (EOC)commissioned Incomes Data Services(IDS) to examine the extent of equal payreview (EPR) activity across the Britisheconomy. The findings, published in theEOC’s report “Monitoring Progress onEqual Pay Reviews”24 in spring 2004,showed that by November 2003, 15%of large employers had carried out anEPR, 10% were in the process ofconducting one, and a further 26%were planning to do one. Of these, 10%planned to start the process within thenext six months and a further 10% todo so between six months and a yearfrom the time of the survey. If theseemployers actually do so, it will meanthat around 45% of large employersshould either have completed an EPR,or be in the process of conducting one,by the end of 2004.

2.148These findings suggest that theGovernment’s target for 35% of largeorganisations to have done an EPR by2006 will be achieved. All GovernmentDepartments and agencies (88 in total)have now completed pay reviews andsubmitted action plans.

Sub-target 3: Women in Under-represented Sectors

(i) Women on Science, Engineering andTechnology (SET) related bodies

2.149The DTI target of 40% femalerepresentation on SET related boardsand councils remains challenging, andhas been rolled forward to 2008. This

was done on the basis of the statisticalinformation DTI received from Non-Departmental Public Bodies.

2.150An initiative being undertaken by theGovernment which will help to meet the2008 target is the setting up of a newUK Resource Centre for Women in SET.It is establishing a database of femaleSET experts. This will serve as a two-way tool: to enable SET boards toactively seek female expertise; and toincrease women’s awareness of theopportunities available.

(ii) Women entrepreneurs.

2.151The target is that by 2006, women willaccount for 40% of customers usingGovernment sponsored businesssupport services. There is evidence thatwomen (70%) are more likely than mento seek business support and advice.For women-owned businesses in2003/04, 29.6% of Business Linkcustomers were women-ownedbusinesses. In the first six months of2004/05, 31% of Business Linkcustomers were women-ownedbusinesses. The upward trend iscontinuing due to a number of positivedevelopments including:

▼ All 45 business Link operators now havespecific delivery plans to supportwomen entrepreneurs;

▼ All nine English regions are developingwomen’s enterprise; some such as theEast Midlands, the North East, NorthWest and Yorkshire and Humber haveprioritised women’s enterprise in theirstrategic planning;

▼ SBS launched the ‘Case for Women’sEnterprise’ in November 2004 – a set ofpractical guidelines, case studies andadvice for customer-facing business


46

24 www.eoc.org.uk/cseng/research/monitoring%20progress%20on%20equal%20pay%20reviews%20research%20findings.pdf

support staff in any organisationproviding support for women’senterprise; and

▼ The DTI Minister of State and Industryand the Regions and Deputy ministerfor Women and Equality undertook aseries of regional visits across England,to raise further awareness of thepotential afforded by the developmentof women’s enterprise to individuals andto regional and national economies.

(iii) Women in Information, Technology,Electronics and Communications (ITEC)jobs.

2.152Women continue to be seriously under-represented in ITEC jobs. There was areduction in the number of womenentering the ITEC profession from 23%in 2002 to 20% in 2003. Over the last12 months the DTI’s ITEC Skills Teamalong with the Women in IT Forum havesought to highlight and bring to theforefront the issue of the lack of womenin the profession, as well as the lack offlexible working arrangements in thesector, which is one of the reasons forthe declining numbers of women inITEC. Other activities that are takingplace to help mitigate the downwardtrend include:

▼ DTI and the Department for Educationand Skills (DfES) are taking forward ajoint strategy, which is a new approachto follow women through education andemployment in the ITEC sector. Thepurpose is to counter negativeperception of ITEC by girls; and

▼ The government is taking an activeinterest in the EOC General InformalInvestigation into occupationalsegregation. Phase two of the reportwas published on 31 March 2005 andwill inform government policy in thisarea.

Sub-target 4 Public Appointments

2.153The Government’s objective is thatboards of public bodies should haveoverall balance of men and women, andthis sub-target aims for women tocomprise over 40% of appointments topublic bodies by 2005. Latest outturnfor 2003/04 was 38.6%, as contained inthe Cabinet Office publication“Delivering Diversity in PublicAppointments 2004.”25

2.154Over the coming months, departmentswill continue to build on the progressthat they have so far made. This will bedone in a number of ways, including:ensuring clearer job descriptions andperson qualifications, which do notcontain unnecessary requirements;raising awareness of the existence ofindividual databases; and holdingseminars and events where sponsorteams can develop contacts withdiversity specialists.

Sub-target 5: Senior Civil Service(SCS)

2.155The civil service target is to double thenumbers of staff from under-represented groups in the SCS by 2005.Civil Service staffing figures for April2004 and Cabinet Office data (April2004) indicate that 24.4% of those inthe very top management positions arewomen; 27.8% of the SCS are women.The target remains challenging.

2.156Action is being taken at corporate anddepartmental level to build on progress,including:

▼ A number of departments have put inplace targeted development schemesfor women aimed at developing andsupporting women with potential toreach the SCS;


47

25 www.cabinetoffice.gov.uk/pau/publications/diversityreport04.pdf

▼ Encouraging more flexible working atsenior levels to promote diversity; and

▼ A network of individual departmentalDiversity Champions was launched inthe summer of 2004.

Sub-target 6: Judicial Appointments

2.157The figures for the appointment ofwomen to the judiciary have improvedduring 2003/04. The figure now standsat 32% – up from 30.7% in 2002/03.During 2003 and 2004, continued effortshave been made to increase awarenessabout the judicial appointments process.The scheme was re-launched in March2004. The Department is continuing toorganise awareness-raising events, toencourage under-represented groupsto apply.

2.158 Improvements to the appointmentssystem have served to increase theprofessionalism and transparency of theappointments process. Following lastyears’ pilot, Assessment Centres havenow been introduced for all deputydistrict judge competitions. It isenvisaged that this system will increasethe diverse make-up of the judiciary, asmore areas can be explored than byinterview alone.

2.159The creation of the new JudicialAppointments Commission will be animportant milestone, and it is envisagedthat there will be an increase inaccountability and transparency.The WEU participated in a series ofstakeholder roundtables during 2004,and contributed a wide range ofdiversity issues as part of thedevelopment of a consultationdocument on increasing judicialdiversity. Following a high level meetingwith officials in the Departmental forConstitutional Affairs, WEU are inputtinginto the project to take the results of theconsultation forward, providingexpertise gained on public appointments

in the City and Corporate sectors, andparticipating in awareness-raisingroadshows. WEU will also provideassistance on developing diversityrelated guidance for the newCommission.

Sub-target 7: Childcare

2.160By 2006 the Government is committedto create 250,000 new childcare placesfor at least 450,000 children in additionto the new places for 1.6 millionchildren to be created between 1997and 2004. As at June 2004 more than1 million new registered childcareplaces since 1997, benefiting well over1.9 million children.

2.161To help meet this target WEU has beenable to contribute to high-level cross-Government committees such as theSure Start Programme Board, in order toensure issues relating to the delivery ofthe Gender PSA are actively considered.This includes a monthly scrutiny of theSure Start Delivery Plan, which monitorsprogress on key areas of the PSA suchas childcare places and childcareworkforce targets.

Sub-target 8: Domestic Violence

2.162Ministers agreed a basket ofperformance indicators that will be usedto measure effectively the success ofthe Government’s domestic violencestrategy. For the purposes of the DTIGender Equality PSA sub-target, DTI willmonitor and report on one of thoseindicators to be used as a proxy fordomestic violence: ‘ the percentage ofdomestic violence incidents with apower of arrest where an arrest wasmade related to the incident’ – PPAFSPI 8a – (derived from individual PoliceForces).

2.163The target will be to increase thenumber of arrests from a baseline figureof 58% in 2003/04.


48

2.164There are limitations relating to theHome Office data. The Home Office iscurrently consulting with Police Forceson their individual compliance with theAssociation of Chief Police Officers(ACPO) definition of domestic violencethat underpins the StatutoryPerformance Indicators (SPI). There arecurrently gaps in the data; the HomeOffice is still awaiting SPI figures fromten of the police forces and haveprovided estimates based mainly on analternative count of domestic violencecounts received from them.

2.165The data is newly established and cameinto effect 2003/04. It will not bepossible to set meaningful trajectoriesuntil the data sources are establishedand possible trends identified over thenext two years


2.166A number of different data systems areused to measure this target’s indicators.These include surveys carried out byindependent bodies on behalf of DTI,such as the Work-Life Balance Survey,and statistics collected by otherGovernment Departments, such as the

Cabinet Office. WEU will be discussingwith other Government Departmentshow to improve upon the exchange ofinformation between them regardingtheir data systems to ensure it is robustand accurate for DTI purposes.

Forward Look

2.167This target is rolled forward in similarterms as SR2004 PSA target 9. Detailsof future plans in this area can be foundin Chapter 10, Maximising Potential inthe Workplace.

In the three years to 2006, takingaccount of the economic cycle,increase the employment rateand significantly reduce thedifference between the overallemployment rate and theemployment rate of ethnicminorities. (Joint target with theDepartment for Work andPensions (DWP))

PSA Target 10


49

0

10

20

30

40

50

60

70

80

Win

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04

Autu

mn 2

004

Sum

mer

200

4

Spri

ng 200

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Win

ter 20

03

Autu

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003

Sum

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200

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Win

ter 20

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Autu

mn 2

002

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200

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Spri

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2

Win

ter 20

01

Autu

mn 2

001

Sum

mer

200

1

Spri

ng 200

1

Ethnic Minorities Employment Rate Overall employment rate Gap

Progress against the ethnic minority employement PSA target summer

2001– winter 2004Figure 2.10:

Overall progress

On course

Current position

2.168Latest data for 2004 shows that therehas been a significant increase in theemployment rate of ethnic minoritiesand that the employment rate gap isnarrowing.

2.169This target’s baselines are an ethnicminority employment rate of 57.8%and an employment rate gap of 16.9percentage points with the overallpopulation (average of the four quartersto spring 2003).

2.170Assessments of success in meeting thistarget take into account sampling error,as far as possible. Given the samplesizes for disadvantaged groups, thesemay be quite large relative to thechange in the employment rate. Thismay mean that it will not be possible tomake a firm judgment of success until along enough run of data is available.A rough rule of thumb to assesssuccess will be that employment ratesfor ethnic minorities have to increase byat least 1 percentage point for theincrease to be significant, and similarlythat the gap with the overall rate has toclose by at least 1 percentage point forthe reduction to be significant.

2.171Latest performance estimates, fourquarter average to winter 2004, showan ethnic minority employment rate of59.5% and a gap against the overallemployment rate of 15.5 percentagepoints. In relation to the target’sbaseline, this represents a 1.7percentage points increase in the ethnicminority employment rate, and a 1.5%decrease in the gap against the overallpopulation. These changes are a

continuation of recent trends and ofsufficient magnitude to meet thetarget’s rule of thumb success criteria.


2.172The current position is the result of asteady upward trend in the ethnicminority employment rate over severalquarters, against the backdrop of agrowing economy and a buoyantgeneral labour market. However, theoverall employment rate has remainedbroadly flat and therefore the gap hasreduced. No substantial changes in theeconomy or the general labour marketare expected in the medium term thatwould lead us to think that currenttrends may reverse.

2.173DWP remain major players in this targetthrough the work of Jobcentre Plus. DTIhas contributed through a number ofpolicy initiatives including:

▼ Guidance about anti-discriminationlegislation on the Business Linkwebsite26;

▼ The role of Acas in promoting diversityand equality in the workplace;

▼ The work of the Ethnic MinorityBusiness Forum e.g. promoting Shariacompliant finance arrangements;

▼ The development of Regional EthnicMinority Business Fora;

▼ Increased outreach by UK Trade &Investment to black and minority ethnicbusinesses to raise awareness of theirservices and increase their take-up ofthe service;

▼ Joint working across Whitehall on theEthnic Minorities and the Labour MarketTask Force supporting the governmentstrategy to increase race equality andcommunity cohesion.


50

26 www.businesslink.gov.uk


2.174The dataset used to measure progressis the Labour Force Survey, a quarterlysurvey of 60,000 households in GB. Inorder to reduce sampling errors to aminimum, four-quarterly averages of theemployment rates will be used.

2.175 In addition work is underway to pilot anew survey in 2005 which will look indepth at perceptions of discrimination inthe workplace.

Forward Look

2.176This target is taken forward in SR2004PSA target 10. Details of future plans inthis area can be found in Chapter 10,Maximising Potential in the Workplace.

Please note that responsibility for PSA target11 lies with UK Trade & Investment. For moredetailed information on this target, please seeUK Trade & Investment’s DepartmentalReport.

Overall progress

On course

Performance of UK Trade & Investment’s

customers

Current position

Indicator (i) At least 30% of new-to-export firms assisted by UK Trade &Investment improve their businessperformance within two years

2002 Annual 2003 Annual 2004 AnnualResult Result Result

32% 35% 30%

Assessment of progress: ON COURSE

Indicator (ii) At least 50% ofestablished exporters assisted by UKTrade & Investment improve theirbusiness performance within two years

2002 Annual 2003 Annual 2004 AnnualResult Result Result

52% 43% 43%

Assessment of progress: SLIPPAGE

Indicator (iii) At least 70% firmsreceiving assistance to win majoroverseas projects reporting that UKTrade & Investment’s help was asignificant factor

2002 Annual 2003 Annual 2004Result Result (survey(January 2003 (January 2004 carried outsurvey) survey) quarterly

during 2004)

58% 61% 36%/80%/76%/68%



2.177The new exporter target – indicator (i) –was achieved for 2004 (on target of30%). It combines both entirely newexporters and inexperienced exporters.Surveys show that entirely new exportersare less likely to succeed than those witha degree of export experience. The 30%figure was intended to provide achallenging target. It was calculated onthe basis that the survey would be

Deliver a measurableimprovement in the businessperformance of UK Trade &Investment’s international tradecustomers; and maintain the UKas the prime location in the EUfor foreign direct investment.(Joint target with FCO)

PSA Target 11


51

including increasing numbers of entirelynew export firms as more funding wasdirected towards this group.

2.178There was slippage in the 2004 resultsagainst the established exporter target,indicator (ii), with the achievement of43% against the target of 50%.Programmes have been rationalised andrealigned for greater focus and 2005results will be closely tracked tomeasure the impact of the changes.

2.179The target relating to major projectsoverseas, indicator (iii), was measuredon a quarterly basis during 2004. Therewas an anomaly in the first quarter’ssample data which skewed results(36%). The resulting aggregate scorewas 65% for the year against a target of70%. The result based on the last threequarters would have been 74%.Achievement now appears to be oncourse.

2.180UK Trade & Investment, after athorough review, rationalised the tradeservices available to its customers. Asimplified portfolio of services, launchedin October 2004, should deliverimproved performance against the PSAindicators in the future (More details onthis can be found in Chapter 7, UK Trade& Investment).

2.181Major overseas projects support coversa wide range of activities to helpcustomers succeed in their bidsoverseas. Many of the projects takeconsiderable time (years) to come tofruition.


2.182An independent external consultant, theUniversity of Reading Business School,currently measures the first twoindicators. Their researchers conductsurveys across a stratified sample of800 firms each year that hadparticipated in UK Trade & Investment

programmes in the preceding 12 to 24months. Information that enables theassessment of UK Trade & Investment’sperformance is gathered by telephoneinterviews of principals in the firms.A proportion of firms are re-interviewedafter a 12-month period to reassesschanges in their business performanceover a longer period.

2.183The third indicator relating to majorprojects overseas is measured by aseparate annual survey. Theindependent consulting firm of Casson& Crispe is used to carry out a numberof interviews with firms (100 in February2004 for the year 2003, and 25 firms atthe end of each quarter in 2004 for theyear 2004) who had received assistancefrom UK Trade & Investment’s SectorTeams or Posts overseas in connectionwith major business projects.

Foreign Direct Investment

Current position

Indicator (iv) The UK’s share of thestock of EU foreign direct investmentas recorded in the United NationsConference Trade (UNCTAD) WorldInvestment Report to be the best inEurope on a year-by-year basis.


2.184The UNCTAD World Investment Reportpublished in September 2004 endorsesthe UK’s position as Europe’s top inwardinvestment location. The UK has bothmaintained the highest total stock andincreased its share of Europeaninvestment stock by $104 billion in 2003to a total of $672 billion, accounting formore than 20% of inward investmentstocks in Europe.

2.185The 2004 report contains inwardinvestment figures for the calendar year2003 and revisions to previous years.


52


2.186The UNCTAD World Investment Report27

is an annual publication which providesan independent form of measurementof the stocks of foreign directinvestment throughout the EU.

Forward Look

2.187This target is rolled forward in similarterms as SR2004 PSA target 11. Detailsof future plans in this area can be foundin Chapter 7, UK Trade & Investment.

Overall progress

On course (where data is available)

Achieve value for moneyimprovements of 2.5% a yearacross the department asmeasured by a basket of indicators

PSA Target 12


53

27 www.unctad.org/Templates/webflyer.asp?docid=5209&intItemID=1397&lang=1

Related targets

SR2000 PSA 10: Deliver a measurable improvement in the business performance

of Trade Partners UK (TPUK) customers. (Joint target with FCO)

Final assessment: PARTLY MET

This target had three measures. Outcome data for the three years covering the SR2000 Periodare summarised below. More detail on performance during this time can be found in recentDepartmental and Autumn Performance Reports.

Indicator 2001/02 2002/03 2003/04

At least 15% of new-to-export firms assisted 32% 35%improve their business performance within two years

At least 50% of established exporters assisted improve 52% 43%their business performance within two years

At least 80% of firms receiving assistance to win major 68% 58% 61%overseas projects reporting that TPUK help was a significant factor

SR2000 PSA 11: Maintain the UK as the prime location in the EU for foreign direct

investment. (Joint target with FCO)

Final assessment: MET

This target was for trends in the stock of foreign direct investment in each three year period(as recorded in the UNCTAD World Investment Report) to be more positive than that of our EUcompetitors.This was achieved for each year according to the UNCTAD annual world report.

More detail on performance during this time can be found in recent Departmental and AutumnPerformance Reports.

Surveydeveloped –no data

Current position

2.188This target is measured using 12indicators, covering DTI programmeexpenditure, HQ administration costsand expenditure by DTI’s agencies.Between them, they cover the majorityof DTI’s programme and administrationcost expenditure within theDepartmental Expenditure Limit (DEL).

2.189For the 12 indicators, two are ahead,seven are on course, two are not yetassessed and one is showing slippage.Current performance is summarised infigure 2.11.

Programme and capital expenditure

indicators

Indicator A, Science andEngineering Base

2.190Value for money is measured in termsof improved outputs against reducedadministration expenditure, with part ofthat budget then reprioritised towardsvarious programme areas and byResearch Councils seeking toconcentrate funding on the best qualityresearch and reduce the unit cost, forexample through the use of sharedfacilities. The detail of this measure willbe finalised and published shortly.

Indicator B, Business Link Operators

2.191Value for money is assessed on thebasis of Small Business ServiceBusiness Link Operators’ (SBS BLOs)Core Services Budget per businessuser. The baseline performance wasSBS BLOs Core Services Budget costsof £457 per business user in 2002/03.The target is that costs per businessuser on the same basis should be lessthan £330 by 2005/06. Preliminary dataindicates this target was met in2003/04.

Indicator C, Business Support

2.192A new “Efficiency Improvement NetPresent Value (NPV) Index” for the DTI’snew business support products willmeasure year-on-year efficiencyimprovements. The target will be toincrease this index by 2.5% year onyear more than any growth in DTIexpenditure on business support.

Indicator D, Business.gov

2.193This is a cross-Government programmeaimed at joining up and improvinggovernment e-services for business.The project is on course to achieve thetarget £15 million saving on its originalbudget of £65 million.

Indicator E, Other programmeefficiencies/economies

2.194We are on course to achieve totalcashable programme savings of£14 million over 2004-06.

Indicator F, Consultancy.

2.195The Department spends some £90million a year on consultancy, virtually allas programme expenditure. A Reviewof how this expenditure is procuredand managed, undertaken in autumn2003, identified a package ofrecommendations aimed at improvinghow the Department decides whetherto buy in consultancy and howconsultancy services are procured andmanaged. New arrangements wereintroduced on 1 April 2004. Thesemeasures are already having somepositive effects and the early indicationsare that the Department is on course toachieve, or better, its target of reducingits net consultancy programmeexpenditure by £5 million a year from2005/06 onwards.


54

Administration cost expenditure indicators

Indicator G, Pay and Workforcesupport cost savings

2.196Total staff costs for 2003/04, coveringDTI headquarters and SBS staff, were£165 million in 2003/04, against the2002/03 baseline of £171 million. For thefinancial year 2004/05 the Department

had a target of reducing its core staffnumbers by 300 (approximately 7% ofthe total) delivering savings of £4 million.

Indicator H, Accommodation andoffice support costs of DTI HQ

2.197DTI is on course to reduce the numberof its central London buildings from sixto three by September 2005, and has


55

Indicator Target Latest position Assessment

Slippage-7% in 2003/04Reduce admin costs by 3%in real terms

Employment

Tribunals Service

+3.9% in 2003/04Contain investigations unitcost at +10%

On course-6.2% in 2003/04Contain case admin unit costat +1%

Insolvency Service

On course2.6% in 2003/04Increase output relative toexpenditure by 2.5% p.a.

Patent Office

On course4.9% in 2003/04Unit cost reduction of 3% p.a.Companies House

On courseOn course to reduce centralLondon buildings from six to threeby Sept 2005

Annual costs to be £52m by2006/07. A reduction of 15%on baseline

Accommodation

AheadTotal staff costs for DTI HQ andSBS were £165m in 2003/04

Total staff costs for DTI HQand SBS of:

£171m in 2003/04 £170m in2004/05 £170m in 2005/06

2002/03 baseline £171m

Pay and workforce

On courseNew systems in place from April2004

Saving of £5m in 2005/06. Baseline £93m in 2002/03

Consultancy

On courseSavings have been identifiedSaving of £14m over2004/05, 2005/06

Other efficiencies

On course£15m saving on originalbudget of £65m

Business.gov

Not yet

assessed

The detail of this measure will be finalised and published shortly.Business Support

Ahead£320 per user in 2003/04Costs per user of £330 by2005/06.Baseline £457 peruser

Business Links

Operators

Not yet

assessed

The detail of this measure will be finalised and published shortly.Science and

Engineering Base

PSA 12 Performance SummaryFigure 2.11:

completed the restack of its mainbuilding to achieve a ratio of eight desksto ten people by March 2005.

Agency value for money targets

Indicator I, Companies House

2.198 In 2003/04 Companies House delivereda 4.9% unit cost in documentregistration (target 3%).28

Indicator J, Patent Office

2.199 In 2003/04 Patent Office increasedoutput in relation to current expenditureby 2.6% (target 2% over a rolling threeyear period).29

Indicator K, Insolvency Service

2.200 In 2003/04 Insolvency Service unit costof case administration fell by 6.2%(target no more than + 1%), unit costof investigations rose 3.9% (target nomore than + 10%).30

Indicator L, Employment TribunalsService (ETS)

2.201 In 2003/04 ETS administrative unit costsrose 7% in real terms (target is a 3%real terms reduction). This target hascontinued to prove problematic in termsof giving a misleading result when thenumbers of applications and resourcesfluctuate. ETS completed fewer cases,with more effort (due to theircomplexity) while costs, especiallyjudicial salaries and the employer’scontribution to judicial pensionsincreased considerably. This target isbeing reviewed by ETS with a view toagreeing with DTI and the Departmentof Constitutional Affairs (DCA) a morerobust and meaningful indicator of ETS’sefficiency.31


2.202DTI’s Strategy32 and Business Plan33 setout how we will strengthen our focuson delivery and improve value-for-money. An Efficiency Programme hasdeveloped a new business model forthe Department to enable us to deliverthe DTI Strategy efficiently andeffectively. Our vision is of a smaller,simpler and more responsive coreDepartment focused on its nationalpolicymaking and influencing role. DTIservices to customers will be deliveredby contractors, partners or agencies –and those delivered by DTI will be fromregional locations.

2.203The 2004 Spending Review White Papersets DTI a target to achieve annualefficiencies of at least 2.5% a year,equivalent to some £380 million by2007/08. At least half of theseefficiencies will be cash-releasing,allowing resources to be recycled topriority programmes. DTI has publisheda Technical Note which sets out howthis target will be met.34


2.204The 12 indicators to measure this targetuse a variety of different data systems,mostly derived from the annualreporting systems used by theDepartment and its agencies.

Forward Look

2.205This target is rolled forward in theDepartment’s SR2004 EfficiencyTargets. Further details can be found inChapter 17 Managing the Department.


56

28 For more information see Companies House Annual Report 2003-04 at www.companies-house.gov.uk/about/pdf/annrep.pdf29 For more information see Patent Office Annual Report 2003-04 at www.patent.gov.uk/about/reports/anrep2004/index.htm30 For more information see the Insolvency Service Annual Report 2003-04 at www.insolvency.gov.uk/pdfs/annual2003-04web.pdf31 For more information see the Employment Tribunals Service Annual Report 2003-04 at www.ets.gov.uk/annualreport2004.pdf32 www.dti.gov.uk/about/strategy2003.html33 www.dti.gov.uk/about/businessplan.html34 www.dti.gov.uk/efficiency_technicalnote.html


57

Related target

SR2000 PSA 12: Achieve value for money improvements of 2.5% a year across the

department

Final assessment: MET

Results for value for money improvement across Departmental operations under this targetamounted to 3.03% across the three years covered by the SR00 period (2001/02 to 2003/04).

The main improvements came from efficiencies in the Department’s procurement practicesand from improving the use of the Department’s accommodation to lower costs per head.

PSA Target Performance

6. To increase by 50% the 1997/98 number ofcompanies spun out from universities by 2001-02.

Met

Final assessment set out in APR 2002.

5. To improve the overall international ranking of theScience and Engineering Base in terms of quality,relevance and cost-effectiveness.

Met – ongoing

Final assessment set out in APR 2004. Related toSR02 PSA 2.

4. To secure an increase in the number of highgrowth business start-ups.

On course

There is a four-year time lag in the measurement ofthis target.

3. To increase the productivity and profitability ofSmall/Medium Enterprises (SMEs) assisted byBusiness Link partnerships and to show year-by-year improvements in the quality of servicesdelivered under the Business Link brand.

Partly met


2. To secure improvements in performance againsta set of competitiveness indicators to be developedand published annually from 1999.

Met – ongoing


1. To put in place policies to narrow the productivitygap relative to other industrialised countries overthe cycle.

Partly met – outside period


Comprehensive Spending Review 1998

Summary Performance against previous spending review’s public service

agreementsFigure 2.12:


58



5. Improve the overall international ranking of theUK’s science and engineering base, as measuredby international measures of quality, cost-effectiveness and relevance.

On course

Related to SR02 PSA 2.

4. Improve the economic performance of all regionsmeasured by the trend in growth of each region’sGDP per capita. (Joint target with DETR [ODPM])

On course


3. Make and keep the UK the best place in theworld to trade electronically, as measured by thecost of Internet access and the extent of business-to-business and business-to-consumer transactionscarried out over e-commerce networks.

Not met

Final assessment set out on page 45.

2. Help build an enterprise society in which smallfirms of all kinds thrive and achieve their potential,with an increase in the number of peopleconsidering going into business, an improvement inthe overall productivity of small firms, and moreenterprise in disadvantaged communities.

Slippage


1. Improve UK competitiveness by narrowing theproductivity gap with the US, France, Germany andJapan over the economic cycle. (Joint target withHM Treasury)

On course


Spending Review 2000

12. To improve UK performance in transposition ofEU Single Market measures to enable 98% ofmeasures to have been transposed into UK law byend 2000.

Not met


11. To maintain or improve levels of energysecurity, diversity, sustainability and competitiveenergy prices.

Met – ongoing


10. To maintain the UK as the prime location in theEU for foreign direct investment.

Met


9. To improve support for exporters, raise thequality of service, generate additional exports andenhance the business image of the UK.

Met


8. To make the UK the best place in the world totrade electronically by the end of the Parliament.

Not met


7. To increase from 350,000 to 1.5m the number ofUK SMEs wired up to the digital market place by2002.

Met


DTI’S New Public Service Agreement

Targets as published in Spending

Review 2004

Aim

Deliver Prosperity for All by driving upproductivity and competitiveness throughworld-class science and innovation, successfulenterprise and business, and fair, competitivemarkets.

Objectives and PerformanceTargets

Objective I: Raising the rate of sustainableproductivity growth

PSA 1: Demonstrate further progress by 2008on the Government’s long-term objective ofraising the rate of UK productivity growthover the economic cycle, improvingcompetitiveness and narrowing the gap withour major industrial competitors. Joint with

HM Treasury


59


12. Achieve value for money improvements of2.5% a year across the Department as measuredby a set of indicators.

Met

Final assessment set out after section on SR02PSA 12.

11. Maintain the UK as the prime location in the EUfor foreign direct investment. (Joint target withFCO)

Met

Final assessment set out after section on SR02PSA 11.

10. Deliver a measurable improvement in thebusiness performance of Trade Partners UKcustomers. (Joint target with FCO)

Partly met

Final assessment set out after section on SR02PSA 11

9. Improve the environment and the sustainableuse of natural resources, including by reducinggreenhouse gas emissions by 12.5% from 1990levels and moving towards a 20% reduction in CO2emissions by 2010. (Joint target with DETR [Defra])

On course


8. Ensure competitive gas and electricity prices inthe lower half of the EU/G7 basket, while achievingsecurity of supply and social and environmentalobjectives.

On course


7. Have the most effective competition regime inthe OECD, as measured by peer review, andachieve a fairer deal for consumers, as measuredby the level of consumer knowledge andunderstanding of rights and sources of information.

Not met.

This target has been subsumed into SR02 PSA 3,and the report on that target sets out the currentposition.

6. Increase the level of exploitation of technologicalknowledge derived from the science andengineering base, as demonstrated by a significantrise in the proportion of innovating businessesciting such sources.

On course


Objective II: Promoting world class scienceand innovation

PSA 2: Improve the relative internationalperformance of the UK research base andincrease the overall innovation performance ofthe UK economy, making continued progressto 2008, including through effectiveknowledge transfer amongst universities,research institutions and business.

Objective III: Ensuring fair, competitivemarkets and empowering consumers

PSA 3: Promote fair competitive markets byensuring that the UK framework forcompetition and for consumer empowermentand support is at the level of the best by 2008,measuring the effectiveness of the regimethrough international comparisons, supportedby a broader evidence base.

PSA 4: Lead work to deliver the goals ofenergy policy:

▼ To reduce greenhouse gas emissions by12.5% from 1990 levels in line with ourKyoto commitment and to movetowards a 20% reduction in carbondioxide emissions below 1990 levels by2010, through measures includingenergy efficiency and renewables.Joint with Defra and Department

for Transport;

▼ Maintain the reliability of energysupplies;

▼ Eliminate fuel poverty in vulnerablehouseholds in England by 2010 in linewith the Government’s Fuel PovertyStrategy objective. Joint with Defra;

▼ Ensure the UK remains in the top threemost competitive energy markets in theEU and G7.

PSA 5: Ensure that the EU secures significantreductions in EU and world trade barriers by2008 leading to improved opportunities fordeveloping countries and a more competitiveEurope. Joint with the DfID.

Objective IV: Enabling successful enterpriseand business

PSA 6: Build an enterprise society in whichsmall firms of all kinds thrive and achieve theirpotential, with (i) an increase in the number ofpeople considering going into business, (ii) animprovement in the overall productivity ofsmall firms, and (iii) more enterprise indisadvantaged communities.

PSA 7: Make sustainable improvements in theeconomic performance of all the Englishregions by 2008 and over the long term reducethe persistent gap in growth rates between theregions, demonstrating progress by 2006.Joint with HM Treasury and ODPM.

PSA 8: By 2008 deliver a measurableimprovement in the business performance ofUK Trade & Investment’s international tradecustomers, with an emphasis on new-to-export firms; and maintain the UK as the primelocation in the EU for foreign directinvestment. Joint with FCO.

Objective V: Working to deliver equality andto maximise potential in the workplace

PSA 9: By 2008, working with otherdepartments, bring about measurableimprovements in gender equality across arange of indicators, as part of theGovernment’s objectives on equality andsocial inclusion.

PSA 10: By 2008, promote ethnic diversity,cooperative employment relations and greaterchoice and commitment in the workplace,while maintaining a flexible labour market.

Objective VI: safe, secure, cost-effective andenvironmentally friendly nuclear clean-up.

PSA 11: Reduce the civil nuclear liability by10% by 2010, and establish a safe, innovativeand dynamic market for nuclear cleanup bydelivering annual 2% efficiency gains from2006/07; and ensuring successfulcompetitions have been completed for themanagement of at least 50% of UK nuclearsites by end 2008.


60

Standard: Maintaining the UK’s standing asone of the best places in the world for onlinebusiness.

Who is responsible for Delivery?

The Secretary of State for Trade and Industryis responsible for the delivery of this PSA.The Chancellor of the Exchequer is jointlyresponsible for delivering target 1 and,together with the Deputy Prime Minister,target 7. The Secretary of State for theEnvironment, Food and Rural Affairs is jointlyresponsible for delivery of the fuel poverty partof target 4, and with the Secretary of State forTransport, the environmental part of target 4.The Secretary of State for InternationalDevelopment is jointly responsible fordelivering target 5. The Secretary of State forForeign and Commonwealth Affairs is jointlyresponsible for delivering target 8.


61

62

Promoting World Class

Science and Innovation

3 Science and Engineering

4 Knowledge Transfer andInnovation

Supporting Successful

Business

5 Enterprise, Growth andBusiness Investment

6 Strengthening RegionalEconomies

7 UK Trade & Investment

8 Effective Channels withBusiness

Ensuring Fair Markets

9 Extending CompetitiveMarkets

10 Maximising Potential in theWorkplace

11 Corporate and InsolvencyActivity Framework

Secure, Sustainable and

Affordable Energy

12 Sustainability and theEnvironment

13 Security of Energy Supply

14 Nuclear Security and ExportControl

15 Assets and Liabilities

The Executive Agencies

16 The Executive Agencies

Section B

BusinessPlans andPerformance

Introduction

Our challenge is to improve therelative international performance ofUK science and engineering and itsuse by Government and Society

3.1 Modern economies recognise theimportance of a strong public sciencebase to support improvements inwelfare. The outputs we get from thescience base, which include newknowledge, skilled people, newmethodologies, and new networks,have contributed to improvements inthe things that matter to us, such as ourwealth, education, health, environment,and culture. They have also improveddecision-making about the governanceof these things, including better publicpolicy.

3.2 The DTI is responsible both for UKScience Policy (through the Office ofScience and Technology (OST)), and forpromoting the development and use oftechnology by industry. This includessupport for the science base, space,aeronautics and energy research anddevelopment.

Plans for 2005/06

3.3 The DTI’s Business Plan 2005-081 setsout our plans for working with ourpartners to improve the relativeinternational performance of the UK’sscience and engineering research baseand its use by Government and Societyincluding the delivery of PSA targets 22

and 93. We will:

▼ Continue our work towards ensuring thebase becomes financially sustainable,with continued strategic investment inresearch infrastructure, and developinga higher performing, diverse workforcein the research base, includingsignificantly increasing the number ofwomen involved in the governance ofscience, engineering and technology;

▼ Work with other GovernmentDepartments to make better use ofscience and scientific advice in formingand delivering the Government’spolicies;

63

Chapter 3

Science and EngineeringIntroduction

Plans for 2005/06

Performance in 2004/05

Research SustainabilityScience in Government‘Foresight’ and Horizon ScanningResearch CouncilsScience and SocietyInternational Science

1 www.dti.gov.uk/about/dti-businessplan-2004-08.pdf. Summaries of delivery plans can be found at http://www.dti.gov.uk/about/dti-businessplan-2004-08-summary.pdf

2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_2.pdf3 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_9.pdf

▼ Establish ‘Newton Awards’ for cross-disciplinary research with potential forcritical breakthroughs; increase thebenefit UK researchers, businesses andGovernment gain from internationalpartnerships and programmes inscience and technology (measuredthrough annual assessments); and

▼ Help make the public more engagedwith, and confident about, thedevelopment, regulation and use ofscience.


The things we said we would do in theDTI Business Plan 2004-074 are groupedby topic area below with a narrativecovering our performance in 2004/05.

Research Sustainability

With HM Treasury & the Departmentfor Education and Skills (DfES),develop 10 year investmentframework as part of SR2004

3.4 The ‘10-Year Science and InnovationInvestment Framework’5 was publishedon 12 July 2004, alongside the 2004Spending Review6. It sets out theGovernment’s ambition for UK scienceand innovation over the next decade, inparticular their contribution to economicgrowth and public services, and theattributes and funding arrangements ofa research system capable of deliveringthis. The ‘10-Year Framework’ willensure that the UK is one of the mostcompetitive locations for science,research, development and innovation.

3.5 The Government has consultedextensively with key stakeholders indrawing up this investment framework,including the scientific community,

businesses, charities and regional anddevolved bodies, as well as internationalcontacts, and has received invaluablecontribution from a wide range ofindividuals and organisations.

Encourage Research Councils todevelop their engagement withRegional Development Agencies(RDAs) and support RDA activities todevelop Science and IndustryCouncils and build greaterinvolvement in science/businessinteraction.

3.6 The Lambert Review and the 10-YearFramework recognised that ResearchCouncils and RDAs have an importantrole to play in helping promote businessdemand for research activities and infacilitating business-university links.The OST will provide a capacity buildingfund, which will be made available to allResearch Councils and RDAs. Thisshould help facilitate both ResearchCouncils and RDAs Knowledge Transfer(KT) strategy to increase the rate of KTand level of interaction for researchersand businesses at a regional andnational level.

3.7 In February we announced a third roundof the Science Research InvestmentFund (SRIF), which includes fundingfrom DfES, and will provide £1 billion tosupport university infrastructure.

3.8 Regional Science and Industry Councilswere established for all RDAs by end2004. These councils are business ledand should help build strongerrelationships between businesses andresearchers, providing a regionalstrategy for science and technology.


64

4 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf 5 Full text at www.hm-treasury.gov.uk/spending_review/spend_sr04/associated_documents/spending_sr04_science.cfm6 Full text at www.hm-treasury.gov.uk/spending_review/spend_sr04/spend_sr04_index.cfm

Deliver changes to aspects of thesystem of Dual Support to improvethe sustainability of Higher EducationInstitution (HEI) Research

3.9 The Government published a responseto the Dual Support Reform consultationon “The Sustainability of UniversityResearch”. The university sector hassince been extending the “TransparentApproach to Costing” (TRAC) to projectlevel, so as to be able to calculate theFull Economic Costs (FEC) of research,and has been encouraged to priceresearch more realistically, in order toimprove the sustainability of the UKresearch base. In January 2005 theGovernment announced that ResearchCouncils would be paying 80% of theFEC of research projects applied forfrom September 2005 (which is due torise to close to 100%, taking intoaccount capital funding streams, by thebeginning of the next decade). A parallelstrand of work has been ongoing inrelation to the sustainability of PublicSector Research Establishments.

Science in Government

Provide effective top-level Scientificsupport for the Prime Minister intaking forward his priorities, inparticular climate change.

3.10 OST have continued to support theGovernment’s Chief Scientific Adviser(CSA) in his role of advising the PrimeMinister and the Government onscientific issues and improving the wayscience is used by GovernmentDepartments in their work.

3.11 The CSA has been actively involved incommunicating the scientific evidencefor climate change, a key priority for thePrime Minister, and the critical need tomove to a low carbon energy economy,to a wide range of stakeholders bothwithin the UK and internationally. His

High Level Energy Group has continuedto meet regularly to promote the co-ordination and coherence of publiclyfunded energy research.

3.12 Other successes during 2004/05include:

▼ Coordination of the Government’sresponse to the Royal Society/RoyalAcademy of Engineering report onNanoscience and Nanotechnology; OSTwill also head the co-ordination group tooversee implementation of theresponse;

▼ Contributing to a favourable outcome atthe United Nations (UN) which stoppedthe UN from adopting a conventionbanning all forms of cloning includingtherapeutic cloning. This outcomeendorses the UK line that nationsshould make their own decisions onhow to take therapeutic cloning forward;

▼ Supporting the Agriculture andEnvironment BiotechnologyCommission in continuing its role ofadvising on biotechnology issuesrelating to agriculture and environment,taking into account social and ethicalfactors and public attitudes. Its advicehas helped inform recent Governmentpolicymaking on genetically modifiedcrops;

▼ Successful completion of the Non-Departmental Public Body (NDPB)review of the Agriculture andEnvironment BiotechnologyCommission;

▼ Ensuring that the Government’sdecision to move towards replacementof the over 30 month rule with testingfor Bovine Spongiform Encephalopathy(BSE) took full account of the scientificevidence; and

▼ Continuing to ensure that science iseffectively used in the civilcontingencies work.

Science and Engineering

65

Complete assessment of otherGovernment Departments’ scienceand innovation strategies, workingwith HM Treasury and taking fullaccount of the Innovation Review.

3.13 Most departments are now in the finalstages of drafting new science andinnovation strategies or redraftingexisting ones to take account of thepriorities set in SR 2004. OST is workingwith departments to ensure that thesestrategies satisfy the requirements setout in Chapter 8 of the 10-Year Scienceand Innovation Framework. A rollingprogramme of meetings between theCSA and Permanent Secretaries is nowunderway to discuss key issues arisingfrom the work. In our assessment thusfar, there is potential for more to be doneby departments to work together. OST isinvolving its new Horizon Scanning Unitto encourage departments to include along term look at future risks andopportunities, and is working closely withthe Department’s Innovation Group toensure that departments take account ofthe Technology Strategy whenconsidering routes to exploitation fromtheir research.

Complete science reviews ofDepartment of Culture, Media andSport (DCMS) and the Health andSafety Executive (HSE) and startnew reviews

3.14 The science review of the DCMS waspublished in October 20047. This wasthe first of a programme of reviews ofGovernment Departments; the reviewof the HSE is underway and due forpublication by November 2005, with ascoping study for the review of Defrahaving started in January 2005. Datesfor future reviews of other Departmentsare under discussion.

Get the new Council for Science andTechnology (CST) off to a good start

3.15 The CST is the Government’s top-leveladvisory body on science andtechnology policy. It was re-launched bythe Prime Minister in March 20048

under the joint chairmanship of Sir DavidKing (the CSA) and Sir Keith Peters. InNovember, CST published its responseto the Government’s 10-Year Scienceand Innovation Investment Framework.It is currently considering four keystrategic issues including the level ofResearch and Development in theenergy industry and in March 2005published a report ‘Policy throughdialogue’9 that encouraged governmentto do more to engage the public in thedevelopment of science and technologybased policies.

Foresight and Horizon Scanning

Complete Foresight projects onFlood/Coastal Defence, Cybertrustand novel uses of theElectromagnetic spectrum and startnew projects

3.16 Foresight aims to provide challengingvisions of the future, based on currentdevelopments, to ensure effectivestrategies are developed. It does this byproviding a core of skills in science-based futures projects and unequalledaccess to leaders in Government,business and science10.

Foresight Projects completed in2004/05:

3.17 Results from the Flood and CoastalDefence project created detailedscenarios of flood risk and coastalerosion for the UK in 2050 and 2080.The work is now being used to informactivity carried out by Defra, the


66

7 Full text available at www.ost.gov.uk/policy/sciencereview/dcms.htm8 Further details, including membership, can be found at www.cst.gov.uk 9 Full text available at www.cst.gov.uk/cst/reports/#810 Further information on Foresight is available at www.foresight.gov.uk/

Environment Agency, insurers andothers. OST is considering initiatives torepeat the approach in China and/or India.

3.18 The Cyber Trust and Crime Preventionproject created three scenarios lookingat the implications of new informationtechnologies in 2018, with a gamingprotocol to enable participants to testthe implications of these possiblefutures for specific strategic decision-making today. The process was testedon road user charging, and is beingrolled out to other GovernmentDepartments.

3.19 The Exploiting the ElectromagneticSpectrum project which provides avision for the future exploitation of thespectrum to ensure increased UKexploitation of technology. The projecthas informed calls under theDepartment’s new Technology Strategy,and the Department is taking the workforward the networks formed during thework.

Foresight projects ongoing/launched in2004/05 include:

3.20 The Brain Science, Addiction and Drugsproject which is exploring theimplications of developments in areassuch as neuroscience, genetics, thesocial sciences and the arts for themanagement of psychoactivesubstances in the future. The project isdue to launch its findings in July 2005.

3.21 The Intelligent Infrastructure Systemsproject which is exploring theimplications of information andcommunication technologies, and othernew science and technology, for themovement of people and goods thatare robust, sustainable and safe. It islooking ahead to 2050, and is due tolaunch its findings in December 2005.

3.22 The Detection and Identification ofInfectious Diseases project is lookingat the changing patterns of risks ofinfectious diseases and the potential fornew ways of detecting and identifying(and hence responding to) them.The project looks at diseases in plants,animals and humans. It has a stronglyinternational focus, with internationalbodies represented on the stakeholdergroup (e.g. World Bank, GatesFoundation) and strands of work onAfrica and China. It is due to launchits findings in December 2005.

3.23 OST has established an HorizonScanning Centre within ForesightDirectorate to take forward actionsarising from the Chancellor’s 10-YearScience and Innovation strategy. It isnow well underway with pilot activitywith a number of departments. Its aimis to (a) have clarified the level and typeof support for departments’ own horizonscanning by March 2005, and (b) tohave the full results of the first strategichorizon scanning exercise byDecember 2005.

Research Councils11

Improve performance managementand planning framework andadministration strategy for ResearchCouncils

3.24 Science Budget allocations wereannounced on 7 March 2005. Theseallocations have been calculated usinga new system of performancemanagement as set out in the 10-YearScience and Innovation Framework.This system provides a robust way fortranslating the overall strategic prioritiesfor the Science Budget into specificaims and objectives for the Research


67

11 Details of the Research Councils’ Annual Reports and Strategic Plans can be found at: www.bbsrc.ac.uk, www.cclrc.ac.uk, www.esrc.ac.uk,www.epsrc.ac.uk, www.mrc.ac.uk, www.nerc.ac.uk, www.pparc.ac.uk


68

Land and Plant and Ships, Aircraft Equipment, Assets Under Investments TotalBuildings Machinery and Vehicles Fixtures and Construction

Fittings

Net Book

Value:

At 31 March

2004

BBSRC 192.1 – – 1.7 2.3 – 196.1

CCLRC 168.0 107.2 – – 33.7 51.2 360.1

ESRC 2.6 – – 1.0 – – 3.6

EPSRC 4.2 – – 1.7 – – 5.9

MRC 149.7 – 0.6 48.4 1.6 – 200.3

NERC 122.9 2.2 55.8 23.0 19.5 – 223.4

PPARC 33.3 16.4 0.4 – 11.4 – 61.5

Total 672.8 125.8 56.8 75.8 68.5 51.2 1,050.9

Research Councils Capital Assets (£ million)Figure 3.1:

Research Organisation/Council Activity 2003/04 2004/05 2005/06 2006/07 2007/08

EPSRC European Science Foundation 0.2 0.2 0.2 0.2 0.2Total 0.2 0.2 0.2 0.2 0.2

CCLRC12 Institut Laue-Langevin 10.8 13.2 14.5 14.8 13.7European Synchrotron Radiation Facility 6.1 6.6 7.2 7.4 7.6

Total 16.9 19.8 21.7 22.2 21.3

MRC European Molecular Biology Conference 0.3 1.3 1.4 1.5 1.6 European Molecular Biology Laboratory 5.9 6.8 8.1 8.3 9.6 International Agency for Research on Cancer 0.6 0.7 0.7 0.7 0.7 Human Frontier Science Programme 1.0 0.8 0.9 0.9 1.0 EMBO 0.1 0.1 0.1 0.1 EMBL-Special Capital Investments 0.2 European Science Foundation 0.2

Total 7.8 9.7 11.2 11.5 13.4

NERC Ocean Drilling Programme (ODP) 1.0Integrated Ocean Drilling Programme (IODP) 0.7 1.8 2.0 2.1 2.9European Space Agency 46.3 45.9 46.6 46.6 46.6European Science Foundation 0.2 0.1 0.1 0.1 0.1New Initiatives 0.5 0.8 0.7 0.7 0.7

Total 48.6 48.6 49.5 49.6 50.3

PPARC European Space Agency 46.9 55.4 54.2 55.5 56.9Anglo-Australian Telescope 1.5 1.5 1.5 1.5 1.5European Incoherent Scatter Facility (EISCAT) 0.6 0.5 0.5 0.5 0.6European Organisation for Nuclear Research (CERN) 73.1 75.7 79.7 80.2 81.0European Southern Observatory (ESO) 15.0 17.5 22.7 23.1 23.5European Science Foundation 0.1 0.1 0.1 0.1 0.1

Total 137.2 150.7 158.7 160.9 163.6

TOTAL 210.7 229.0 241.3 244.4 248.8

Breakdown of significant international subscriptions by the

Research Councils (£ million) Figure 3.2:

12 From 2003/04 responsibility for both Institut Laue-Langevin and European Synchrotron Radiation facility transferred to CCLRC from EPSRC.

Councils and other delivery agents, andthen to hold them to account fordelivering these.

3.25 OST will monitor and publish a range ofinput, output and outcome data. Thisreporting will both inform policydevelopment within the public sectorand provide the basis for a continuingdialogue with business, the sciencebase and other stakeholders about theimpact of collective investment in UKscience and innovation.

Establish Arts And HumanitiesResearch Council

3.26 The Arts and Humanities ResearchCouncil came into operation on 1 April2005, following the enactment of thenecessary primary legislation in July2004, the approval of a Royal Charter bythe Privy Council and the necessarytransfer of authority from the ScottishParliament to Westminster. TheDepartment worked closely with theofficials of the predecessor body, theArts and Humanities Research Board, toprepare the way for a successful handover of business to the new Councilwhich will provide funding for high-quality research in the arts andhumanities for the cultural, creative andeconomic life of the nation.

Science & Society

Take forward Science & SocietyAgenda

3.27 The Department is engaging withsociety to shape science, engineeringand technology (SET) for the benefit ofthe UK. Our vision is a society at easewith science and innovation, wherepeople understand the nature of scienceand its uncertainties and are confident

that the SET community is servingsociety’s needs. The following areexamples of such work.

Public Engagement

3.28 Government aims to foster constructive,open, inclusive and informed dialoguebetween citizens and the scientificcommunity. As the main vehicle for this,the Department operates theSciencewise13 public engagement grantsscheme which was launched by LordSainsbury at the British AssociationFestival of Science in Exeter inSeptember 2004. Among the keythemes for 2004/05 werenanotechnology, energy and climatechange and the use of animals inmedical research. Over 60 applicationswere received in the first round andseven projects will be funded.

Research careers

3.29 OST has implemented therecommendations of the Roberts’Review “SET for Success”14 that wereconcerned with research careers. Thishas included awarding 398 AcademicFellowships in October 2004. As part ofthe continuing focus on improving theattractiveness of research careers, theDepartment established the ResearchCareers Committee15, chaired byProfessor Sir Gareth Roberts, whoseremit is to advise and inform interestedparties on issues relating to researchcareers. One of the committee’s firsttasks will be to review the need for, andformat of, a new Concordat for researchstaff. This work is underway, and it isanticipated that this will be ready in thesecond half of 2005.


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13 www.sciencewise.org.uk 14 www.hm-treasury.gov.uk/Documents/Enterprise_and_Productivity/Research_and_Enterprise/ent_res_roberts.cfm 15 www.ost.gov.uk/research/research_careers/index.html

Diversity in Science, Engineering andTechnology (SET)

3.30 The Department aims to value diversityand to maximise the contribution ofwomen, people from black and minorityethnic groups, and the disabled in theSET workforce and in the governance ofSET. With over £4 million of funding wehave funded a new Resource Centre forWomen in SET16. This Centre waslaunched in September 2004 and isworking with SET employers to tacklethe barriers which result in so fewwomen entering certain SETprofessions in the first place, and fromreaching senior positions when they do.

Promotion of Science, Engineering,Technology and Maths to Young People

3.31 The Department wishes to ensure thatyoung people are enthused to enter andremain in the SET workforce. OST,together with a number of externalorganisations, supports SETNET17, theScience, Engineering, Technology andMaths Network. SETNET coordinates aUK-wide communication networkbetween schools and the manyhundreds of schemes, activities,competitions and curriculum resourcesthat are available. SETNET alsocoordinates the Science andEngineering Ambassadors programmewhich provides schools with young,trained and vetted volunteerambassadors with SET backgrounds toact as role models.

3.32 The Department provides grant-in-aid tothe Royal Academy of Engineering(RAEng)18 and the Royal Society (RS)19 insupport of researchers, including youngpeople. In 2004, the RAEng hasextended its fellowship schemes, many

of which lever support from industry.The RS launched its relocationfellowships, which are designed tosupport career mobility. It also initiatednew collaborations with India and Chinaby offering incoming fellowships to theUK from each country.

International Science

EU

3.33 The EU’s Framework Programmes forResearch and TechnologicalDevelopment (RTD) are the mainfunding mechanisms for supporting andencouraging collaborative RTD in theEU. The current Sixth FrameworkProgramme (FP6), which has a budgetincreased to €19 billion since the newMember States joined the EU in May2004, focuses on larger scale, longer-term, projects with a significant futureimpact in terms of innovation andcompetitiveness.

3.34 The Government has expanded its FP6promotion and advisory services to UKorganisations through the introductionand development of FP6UK, whichprovides comprehensive website,National Contact Point and helplineservices. The Department is activelyseeking to better integrate theseservices with other business supportmechanisms, including those offered byRegional Development Agencies (RDAs)and Devolved Administrations (DAs).The Department has also taken up theconcerns of UK participants and OGDsto secure improvements in theProgramme’s implementation, includingsuccessfully pressing the Commissionto improve the administrative processesassociated with bidding into FP6 andundertaking FP-supported projects.


70

16 www.setwomenresource.org.uk 17 www.setnet.org.uk18 More information about the Royal Academy of Engineering including its annual review, accounts and management plan can be found at:

www.raeng.org.uk/ 19 More information about the Royal Society including its annual review can be found at: www.royalsoc.ac.uk

3.35 Preparations for the next FrameworkProgramme (FP7), which is due to startat the end of 2006, are underway.The Department takes the lead informulating and representing the UKview during the negotiations, takingaccount of views from all stakeholders(including potential participants,Research Councils, universities, industryand others). OST also commissionedtwo independent research projects toprovide evidence to underpin the UKpolicy: a review of existing evidence oninternational R&D programmes20 and anevaluation of the impact of theFramework Programmes in the UK21.The Department also undertook a publicconsultation on FP7 during spring 2004,publishing a consultation document22

and holding a consultation event thatinvolved over 200 UK stakeholders.The Department published its responseto the consultation23 alongside an initialUK position paper24 at the end ofNovember 2004. The formalCommissions proposals on FP7 werepublished on 6 April 200525, whichoutlined the Commission’s thinking onFP7. Discussions on this document atEuropean level are underway and willcontinue into the UK Presidency ofthe EU.

Global Policy

3.36 Under the 10 Year Science andInnovation Investment Framework, across-Governmental Global Science andInnovation Forum (GSIF) wasestablished in January 2005, chaired by

Sir David King and reporting to theMinisterial Group on Science, Innovationand the Knowledge Economy. TheForum brings together for the first timeall key UK players in internationalscience and innovation. Its mandate istwofold:

▼ Excellent and efficient global scienceand innovation; and

▼ Global stability/prosperity throughscience and innovation: focusing on theG8 Presidency themes – climate changeand African development.

3.37 GSIF has commissioned work on a UKInternational Strategy – a commitmentunder the Investment Framework – toensure that Government actions takeaccount of the changing internationaleconomic and research environment,that key initiatives and opportunities areidentified and that the UK pursuespriorities to ensure that internationalresearch structures meet our needs.The scoping phase has been completed,drawing on input from Government andexternal stakeholders. Evidence studiesare being commissioned to underpindevelopment of the strategy during2005/06.

3.38 GSIF is also coordinating workstreamsunder the broad headings of research,exploitation, EU R&D framework,international facilities, climate changeand Africa, as well as continuing bilateralS&T relations with priority partnercountries. These have culminated in acomprehensive programme of bilateralvisits during 2004/05 by Lord Sainsbury


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20 Technopolis Targeted Review of Added Value Provided by International R&D Programmes, May 2004 (available at:www.ost.gov.uk/ostinternational/fp7pdfs/FP7TargetedReview.pdf.)

21 Technopolois The Impact of the EU Framework Programmes in the UK, July 2004 (available at:www.ost.gov.uk/ostinternational/fp7/pdfs/evaluation.pdf)

22 Office of Science and Technology 7th EU R&D Framework Programme: A Consultation Document, April 2004 (available at:164.36.164.103/ostinternational/fp7/pdfs/conspaper.pdf)

23 Office of Science and Technology Government Response to the Consultation on the 7th EU R&D Framework Programme, November 2004 (availableat: www.ost.gov.uk/ostinternational/fp7/response.pdf)

24 Office of Science and Technology UK Position Paper on the Initial Approach to the 7th EU Research and Development Framework Programme,November 2004 (available at: www.ost.gov.uk/ostinternational/fp7/ukpaper.pdf)

25 Full text available at: http://.europa.eu.int/eurlex/lex/LexUriServ/site/en/com/2005/com2005_0119en01.pdf

and Sir David King to China, India, Japan,Korea, Russia and the US; their purpose– to strengthen bilateral relationsthrough Government agreements,promote partnerships in science andinnovation, and further UK policyobjectives in climate change, sustainableinternational development and Africa.

3.39 Other notable achievements includecoordination, with DfID, of theGovernment’s response to the House of

Commons’ Select Committee Inquiry intothe role of science in internationaldevelopment; S&T input into theCommission for Africa; a high levelworkshop with Canada and Africa on S&Tcapacity building in Africa; and securingthe second tranche of funding for theDorothy Hodgkin Postgraduate AwardScheme (to fund up to 160 students fromemerging and developing countries).


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2003/04 2004/05 2005/06 2006/07 2007/08Outturn27 Working Plans Plans Plans

Provision28

Total OST expenditure on science 2,253.3 2,608.0 3,030.0 3,130.5 3,341.6

of which:

Arts and Humanities Research Council – – 80.5 91.4 97.1

Biotechnology and Biological Sciences Research Council 269.1 287.6 336.2 371.6 381.8

Economic and Social Research Council 88.8 105.3 123.3 142.3 150.1

Engineering and Physical Sciences Research Council 378.8 497.3 568.0 634.1 718.0

Medical Research Council 420.9 455.2 478.8 503.5 546.5

Natural Environment Research Council 292.1 315.1 338.4 363.8 371.6

Particle Physics and Astronomy Research Council 272.7 274.0 293.9 306.5 315.2

Council for the Central Laboratory of the Research Councils 119.0 124.3 160.1 175.4 212.5

Research Councils' Pensions Scheme 29.7 31.1 33.2 – –

Royal Society 29.4 31.0 32.5 36.4 41.1

Royal Academy of Engineering 5.3 5.6 5.9 7.9 9.8

British Academy – – 14.1 18.1 21.4

Diamond Synchrotron 36.2 86.9 57.4 51.9 –

Joint Infrastructure Fund 43.6 – – – –

Science Research Infrastructure Fund 262.2 296.6 300.0 300.0 300.0

Capital Yet to be allocated – 39.7 45.4 60.4 104.7

Foresight LINK Awards 3.0 2.0 – – –

Exchange Rate and Contingency Reserve – 25.0 – – –

Delivering sustainability DUP – 8.4 119.6 – –

Restructuring, minor initiatives and contingencies 2.5 22.9 42.8 64.3 68.8

International collaboration – – – 3.0 3.0

Expenditure on Science (£ million)26Figure 3.3:

26 All figures rounded to the nearest £100K27 The 2003-04 are taken from the DTI Resource Accounts.28 The 2004-05 figures are the net provision in the Spring Supplementary Estimates.

Introduction

Our challenge is to promote effectivetransfer of knowledge to improve UKinnovation performance andaccelerate business exploitation ofscience and new and existingtechnologies.

4.1 Innovation is the successful exploitationof new ideas. It’s about turning novelideas and knowledge into the new, highvalue-added products, processes andservices that will give UK businesses acompetitive advantage in a world ofconstantly changing consumer demandand technological development.

Plans for 2005/06

4.2 The DTI’s Business Plan 2005-081 setsout our plans to drive up the knowledgetransfer and innovation performance ofthe UK economy including the deliveryof PSA target 22. We will:

▼ establish effective networks that involvebusiness, government, research baseand global partners that improvesknowledge transfer and access toinfrastructure;

▼ increase business engagement anddemand for the Technology Strategyand Programme (leading to increasedBusiness Research & Development(R&D) activity), enable world-classmeasurement, Intellectual Propertyand standards frameworks; and

▼ lead the innovation agenda acrossgovernment, business and otherstakeholders, to create strongerpartnerships and increase take-up ofgovernment procurement projects.



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Chapter 4

Knowledge Transferand Innovation

Introduction

Plans for 2005/06


Innovation ReportExploitation of Investment in Science BaseNew and Existing ProgrammesTechnical Infrastructure

1 www.dti.gov.uk/about/dti-businessplan-2004-08.pdf. Summaries of delivery plans can be found at www.dti.gov.uk/about/dti-businessplan-2004-08-summary.pdf

2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_2.pdf3 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf

Develop new Technology Strategy.

4.3 Following the recommendations laidout in the Innovation Report, theDepartment has established thebusiness-led Technology Strategy Board(TSB)4, announcing its full membershipin October 2004. The Government’s10-Year Science and InnovationInvestment Framework’5 broadened therole of the TSB, to ensure that theGovernment’s investment framework is

developed to cultivate business R&Dand innovation within the UK. The Boardwill identify technologies that offer thegreatest competitive advantage to theUK and towards which DTI funding willbe directed. The board is developing aTechnology Strategy and Programmethat are supported by horizon scanningactivities and intends to publish its firstannual report in autumn 2005.


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PRIORITY ACTION 2004/05: Encourage innovation in UK businesses through our

innovation action plan (published as part of our Innovation Report in December 2003).

The Innovation Report was published in December 2003, following a review of the UK’sinnovation performance. This involved an in-depth analysis of the critical success factors forinnovation, and consultations with a wide range of stakeholders, including the Confederationof British Industry (CBI), Trades Union Congress (TUC), EEF, Institute of Directors,businesses, universities and the science and technology community. A full report on progressimplementing the commitments made in the action plan in the Innovation Report, can befound on www.innovation.gov.uk

Key Achievements:

▼ Appointment of a business-led Technology Strategy Board (see also paragraphs 4.3 –4.6 of this chapter);

▼ Publication of guidelines designed to make Government purchasing – £125 billion ayear – more open to innovation (see also paragraph 5.16 in Chapter 5 ‘Enterprise,Growth and Business Investment’);

▼ Delivery of an Intellectual Property awareness campaign and workshops for SMEs(www.patent.gov.uk); demonstrations of the value of design to manufacturingcompanies and technology SMEs; greater access to R&D grants for SMEs(www.dti.gov.uk/bss/); enhanced support for women entrepreneurs;

▼ Plans to accelerate knowledge transfer through greater access for business to R&Dexcellence funded by the Research Councils. Creation of a Science and IndustryCouncil or equivalent in every region (see also paragraph 3.6–3.8 in Chapter 3 ‘Science& Engineering’); and

▼ Steps to deliver and reinforce the Government’s Skills Strategy as a major contributorto improving levels of innovation and productivity, including launch of a new structureof apprenticeships (see also Chapter 10 ‘Maximising Potential in the Workplace’)

4 www.dti.gov.uk/technologystrategy/tsbintroduction.html5 www.hm-Treasury.gov.uk/spending_review/spend_sr04/associated_documents/spending_sr04_science.cfm

Innovation Report

Use regional participation to helpidentify technology priorities throughwhich DTI business support fundingshould be channelled, drawing on thehorizon scanning activity alreadycarried out in the regions.

4.4 Drawing on the work on horizon scanningalready carried out in the regions theDepartment has consulted RegionalDevelopment Agencies (RDAs)/DevolvedAdministrations (DAs) on their technologypriorities and will continue to seek theirinputs on the Technology Strategy. Thiswill be further enhanced by theinvolvement of the Science and IndustryCouncils6 during 2005/06.

4.5 The National-Regional Partnership isbeing developed with RDAs to provideimproved synergy in delivering strategicpolicy within the Regions. The secondboard meeting took place on the 20January 2005.

Implement the Technology Programmeand introduce new Business Supportproducts on Collaborative R&D andKnowledge Transfer Networks.

4.6 The Technology Programme is deliveredthrough biannual competitions forfunding. A total of £370 million, whichincludes £50 million from DEFRA, isavailable between 2005-08 in the formof grants in the technology areasidentified by the TSB. Two suchcompetitions were held in April andNovember 2004 for £50 million and£80 million respectively. To date theprogramme has granted 132 projectsand networks £90 million of funding,which includes £15 million for Micro andNanotechnology (MNT) AppliedResearch projects. The MNTManufacturing Initiative announced in2003 under the Technology Programmehas to date allocated £22 million inmicro and nanotechnology facilities

around the UK under the CapitalFacilities programme. In October 2004the UK MNT Network launched aweb-based MNT Forum and morerecently completed a full survey of theUK industrial MNT sector. A NationalComposite Materials Network waslaunched in November 2004 underKnowledge Transfer Network funding.

Exploitation of Investment inScience Base

Further enhance knowledge transferfrom the science base by deliveringthe second round of Higher EducationInnovation Funds and Public SectorResearch Establishment funds.

4.7 The Higher Education Innovation Fund(HEIF) 2 grants have been agreed withmore than £185 million committed to115 organisations, compared to £78million committed to 96 organisations inthe previous round. This represents anincrease of 149% in funding and 20%in organisations reached. Work is nowunder way on the development of HEIF3 and the formal consultation exercisewill begin in summer 2005.

4.8 The Public Sector Research Exploitation(PSRE) 2 has allocated £15 million offunding to research organisations, anincrease of 50% on PSRE 1. Mentoringof public sector research organisationsthat have strong research programmesbut lack knowledge transfer capacities isbeing provided through Partnership UK inpreparation for PSRE 3. An annual surveyof knowledge transfer in PSREs waslaunched in October 2004 and anevaluation of all OST knowledge transferschemes were published in early 2005.

4.9 The Cambridge-MIT Institute (CMI)partnership has been established toundertake education and research thatwill improve competitiveness,

Knowledge Transfer and Innovation

75

6 See also Chapter 3 ‘Science and Engineering’

productivity and entrepreneurship in theUK, and to forge stronger links betweenacademic research and business. Thereport on CMI by the National AuditOffice (NAO) received a successfulhearing from the Public AccountsCommittee (PAC)7, and the firstindependent review of CMI wascompleted in December 2004.

New and Existing Programmes

Work with the UK Energy ResearchCouncil, the Carbon Trust, industryand others to co-ordinate andpromote research and developmentinto energy technologies.

4.10 The United Kingdom Energy ResearchCentre (UKERC), Carbon Trust (CT),academia, industry, and the DTI aredeveloping an energy technologiesroute map to inform the future strategicdirection of our R&D effort that willhave impact on the UK’s technicalcapabilities. The route map will becompleted by autumn 2005.

Build on the UK MicroNano Networkto develop regional and localcollaboration between the scienceand engineering base and businesses.

4.11 The Department has recruited ProfessorHugh Clare who has established a teamof four MicroNano Network (MNT)experts to build and advise on the broadMNT capability. There is early evidenceof improved co-ordination andnetworking within the UK MNT sectorfrom this intervention, with organisationsreporting an increase in networking andcommercial activities, for example INEXhave reported an increase in the value oftheir contracts from an average of£2,000 in January 2004 to £20,000-£100,000 in October 2004.

4.12 The Department is working veryeffectively with the regions, and thebenefits of these partnerships arestarting to be realised through activeRDA/DA involvement in project delivery,including research, communications andevents. The RDA collaboration at theNanofair, Switzerland, had tremendoussuccess, with future events planned.

Work with other Member States andUK stakeholders to take forwardmeasures outlined in the EU’sInnovation Action Plan.

4.13 The Department has been activelycontributing to the development of theInnovation Action Plan, with the UK’sresponse to the Commission’sconsultation submitted in July 2004.The proposed publication date of thefinal plan is spring 2005.

Technical Infrastructure

Complete the new facilities at theNational Physical Laboratory.

4.14 On 20 December 2004 the Departmentagreed a negotiated termination of thePrivate Finance Initiative (PFI) projectfollowing project delays as a result oftechnical difficulties and increased coststhat threatened the project’s viability.As a result the Department will takeresponsibility for the completion andoperation of the facilities. This actionwill make cash and resource savings.Completion of the majority of the worksis expected during 2006 with theprogressive move of scientists to thenew facilities completed during the firstquarter of 2007.

Increase direct services to industryfrom National Weights and MeasuresLaboratory (NWML) by 42%,implement the forthcoming MeasuringInstruments Directive and a new


76

7 See Annex C6 for more detail on the PAC report on CMI

programme on measurement foremerging technologies.

4.15 NWML have restructured itsorganisation into seven market facingbusiness teams each delivering a majorincome stream and as a consequencehas significantly raised its ‘bid rate’ fornew business, winning new customersfor training, type approval andcertification. A full calibration servicewas available in December 2004;qualitative outputs on increased servicesare not available at this juncture asdelays occurred due to a major flood.An increase of 42% on services wasdue to be attained by the end 2006/07.

4.16 Lord Sainsbury approved the MeasuringInstruments Directive implementationplan in October 2004. Following theapproval, an Implementation project anda Project Board were established and aConsultation Document8 issued inNovember 2004.

4.17 The Measurement for EmergingTechnologies Programme wasformulated for approval by the Minister.

Each prospective project has at leastfour industry/academic collaborators anda high degree of promised co-funding.Our expectation is that that the resultingR&D will commence early in 2005/06.

Enhance the efficiency and value formoney provided by the organisationsthat create and support theinfrastructure for innovation,including implementing a NationalStandards Strategic Framework.

4.18 The National Standardization StrategicFramework (NSSF) aims to raiseunderstanding and awareness of thecommercial and strategic importance ofstandards. Research reports andeconomics papers, now nearingpublication, will be used to reinforce thecase being put to business andgovernment audiences for wider use ofstandards. It has already delivered someuseful demonstrator projects. Oneexample packaged a variety of standardsuseful to the boatbuilding sector, makingstandards more accessible especially tosmall businesses.

Knowledge Transfer and Innovation

77

8 Full text available at http://www.nwml.gov.uk/legis/MID_consultation_document.pdf9 All figures rounded to the nearest £100K10 Includes existing programmes, such as CARAD, Link and Eureka! and new programmes utilising the new Business Support products, such as

Knowledge Transfer Partnerships (formerly TCS). The reduced spend in 2004-05 and 2005-06 is due to the savings from completed legacy schemesand the migration of activities to the Technology Strategy from April 2004.

11 Includes existing programmes, such as Global Watch (formerly ITS), Faraday Partnerships, and new programmes utilising the new Business Supportproducts, such as Nanotechnology, collaborative R & D and Knowledge Transfer Networks.

12 Includes Higher Education Innovation Fund, Public Sector Research Exploitation Fund. The lower than expected spend in 2003-04 and 2004-05 isdue to the alignment of the Higher Education Innovation Fund spend with the academic year.

13 Includes National Measurement System, Materials Metrology, Standards and Accreditation. The higher spend and forecast figures are due to theinclusion of capital.

2003/04 2004/05 2005/06 2006/07 2007/08Outturn Working Plans Plans Plans

provision

TOTAL 289.9 313.7 349 349.6 408.6

Of which:Knowledge Transfer (formerly Industrial Exploitation of Science)10 115.7 92.9 104.6 32.2 19.2

Technology Strategy Activities (formerly part of Knowledge Transfer)11 0 21.7 38.3 98.3 168.3

Exploitation of Investment in the Science Base12 48.8 76.0 91.4 104.4 106.4

Technical Infrastructure13 83.7 86.1 81.8 81.8 81.8

Space 41.7 37.0 32.9 32.9 32.9

Expenditure on Knowledge Transfer (£ million)9Figure 4.1:

Introduction

Our challenge is to build anenterprise society, that supportsproductivity growth and embraces allcommunities and groups of people.

5.1 A combination of enterprise, hard workand supportive policies have placed theUK in the enviable position of risingemployment and rising prosperity.As we address the new competitivechallenges and take forward our FiveYear Programme, we make a new offerto business. At the core of this offer isthe recognition that the challenges ofthe global economy mean rectifyinglongstanding weaknesses in the UKeconomy, and meeting head-on someof our emerging structural problems.

5.2 Despite the flourishing enterpriseculture, we still have lower start-uprates than the US. There are particularcultural barriers to starting a businessamong women (where the female start-up rate is half the male rate) and some

ethnic minority groups anddisadvantaged communities.

5.3 Despite progress in recent years, toofew UK small firms turn into worldbeating companies. There are a numberof factors: some businesses faceproblems in accessing private sectorfinance; others find difficulties inattracting talented managers.

5.4 Although many smaller firms are at theforefront of innovation, finding it easier toadapt to changing markets, others find itmore difficult to find the information,advice and guidance they need. This risksleaving them behind their competitors inadopting new ideas or techniques.

Plans for 2005/06

5.5 The DTI’s Business Plan 2005-081 setsout our plans to promote enterprise,growth and business investmentincluding delivery of PSA targets 62, 93

and 104. We will seek to:

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Chapter 5

Enterprise, Growth andBusiness Investment

Introduction

Plans for 2005/06


Improving Service DeliveryEnterprise CultureDisadvantaged Communities and Under-Represented GroupsSocial EnterpriseAccess to FinanceLaunch Investment


2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_6.pdf3 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_9.pdf4 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_10.pdf

▼ Increase the proportion of peopleconsidering going into business throughan annual enterprise week and otherenterprise awareness activities;

▼ Raise the level of enterprise, asmeasured by the rates of self-employment: (i) in disadvantagedcommunities; (ii) amongst women; and(iii) amongst under-represented ethnicminorities; and

▼ Reduce the percentage of businessesthat want to grow but reportingdifficulties in obtaining finance througha pathfinder round of Enterprise CapitalFunds, improvements to the SmallFirms Loan Guarantee product andsteps to improve investment readinessin small businesses.



Improving Service Delivery

Implement the Government strategyfor helping small businesses to grow.

5.6 The Small Business Service (SBS) hasbeen working closely with the InlandRevenue (IR) on ensuring that R&D taxcredits are well known and used toadvantage by small and medium-sizedenterprises (SMEs) in line with thecommitments made in the GovernmentAction Plan for small businesses6. TheIR is now publicising the tax credit asplanned.

5.7 The SBS has been particularly active indeveloping the Small BusinessResearch Initiative. The Initiative aims to

boost the success of smaller R&D-based businesses in obtaining contractsfrom government bodies to conductresearch and development on theirbehalf, increasing the size of the marketavailable to them, encouraging them toincrease their R&D capabilities, andeventually creating opportunities forthem to employ their knowledge in newways on the open market. At least 2.5%of departments’ and agencies’ extra-mural R&D contracts will be be placedwith SMEs.

5.8 The SBS Chief Executive’s BusinessTransfer review was successfullyconcluded with the publication of‘Passing the baton – encouragingsuccessful business transfers’7. TheSBS is actively following this up viadialogue with the DevolvedAdministrations, the RDAs, andinterested professional bodies.

5.9 The SBS has worked with DfES on thenational roll out of a management andleadership programme. Proposals havebeen agreed and roll out has begun.Complete coverage is expected acrossEngland in 2005.

Improve the effectiveness of BusinessLink

5.10 The SBS organised familiarisationtraining on the department’s businesssupport products for Business Linkadvisers, and has worked with TheDepartment for Environment, Food andRural Affairs (Defra) to develop BusinessLink packages of advice and support forbusinesses in lagging rural areas.Further training is planned for advisersin 2005.

Enterprise, Growth and Business Investment

79

5 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf6 Full text at www.sbs.gov.uk/content/7-strategies/ActionPlan.pdf) 7 Department of Trade and Industry, Passing the baton – encouraging successful business transfers, November 2004 (Available from

www.sbs.gov.uk/content/services/passingthebaton.pdf)

5.11 Business Link Operator (BLO)performance continued to improveduring 2004/05. The 45 operatorshelped more than 620,000 customers –a 2.7% increase on the numbersassisted during 2003/04. Customersatisfaction continued to improve witha record 91% of customers beingsatisfied with the service they received.

5.12 The award winning web portalwww.businesslink.gov.uk has joined upthe services provided by over 50departments and agencies. The portal isnow attracting over 700,000 visits eachmonth. The cumulative total number ofvisits since the site was first launched inNovember 2003 is now over 7 million.

Launch two new business supportproducts. The first is to helpdisseminate new and existing bestpractice, the second to helpimplement best practice activitiesthrough subsidised consultancy.

5.13 Two new business support productswere launched in April 2004 under“Achieving Best Practice in YourBusiness”. Both products have beensuccessful: by January 2005 BLOs haddelivered 2,394 business diagnostics toSMEs. Some 800 of these have led tosupported business improvementprojects. This is supported by thematerial on www.dti.gov.uk/bestpractice,which won an award of excellence atthe 2004 “Communicators in Business”awards.

Pilot a project to simplify funds fromvarious Government Departments fordelivery of business support servicesthrough the RDAs/through SBS pilotsand other regional initiatives, betteralign business support with RegionalEconomic Strategies.

5.14 The Strategic Alignment Project hasbrought together partners at national,regional and local levels to consider howsupport can best be co-ordinated todeliver a coherent service that meetscustomers’ needs and contribute to theobjectives of the regional economicstrategies. In conjunction with the relevantRDAs two pathfinders began to run fromApril 2005 in the North East and EastMidlands to test the joined up delivery ofservices. The project aims to makerecommendations, based on theexperience of the pathfinders on aligningbusiness support, to the 2006 SpendingReview.

Implement the Broadband BritainAction Plan, including intelligentprocurement of £1 billion ofbroadband for public services on aregional basis.

5.15 Please see paragraphs 8.11 – 8.13 ofChapter 8 ‘Effective Channels withBusiness’.

Help businesses and otherstakeholders implement the Office ofGovernment Commerce (OGC) ActionPlan on competition and capacitybuilding in public procurement.

5.16 The SBS and the OGC have helped inthe implementation of the four strandsof the procurement effort through:

▼ Development of the Supplier Route toGovernment Portal8 which will providebetter publicity for and easier access topublic sector procurement opportunities;


80

8 For more information visit www.supplyinggovernment.gov.uk/newportal.asp

▼ Encouraging sign up to the smallbusiness Procurement Concordat bypublic sector bodies to make tenderingprocedures and requirements moreSME friendly;

▼ The launch of two pilot procurementschemes in the West Midlands andHaringey aimed at ensuring SMEs haveeasier access to public sector contracts;

▼ Working with other departments toreview the pattern of existinggovernment procurement from SMEs,enabling departments to improve theeffectiveness of their procurementsystems, and reporting on progress byBudget 2005 and on an annual basis toprovide greater transparency about theamount of government procurementfrom SMEs; and

▼ Developing the Small BusinessResearch Initiative (see paragraph 5.7above).

Pursue Digital TV switchover with theDCMS, broadcasters and otherstakeholders.

5.17 Please see paragraphs 8.14 – 8.15 ofChapter 8 ‘Effective Channels withBusiness’.

Enterprise Culture

Support work to raise levels ofenterprise awareness, such as YoungEnterprise, and encourage creativenew initiatives in this area throughthe Enterprise Promotion Fund.

5.18 The SBS provided £0.76m in 2004/05 tosupport Enterprise Insight’s ‘Make yourMark’ campaign, the highlight of whichwas the successful inaugural ‘EnterpriseWeek’ in November 2004 to raiseenterprise awareness amongst 14–24year olds. Over 1,100 events took place

across the country, organised by morethan 480 organisations, and involving158,000 participants. The next‘Enterprise Week’ will be held inNovember 2005.

5.19 The National Council for GraduateEntrepreneurship9 was launched inSeptember 2004. The Council hostedand organised an InternationalConference in January 2005. A series ofregional events, including the DevolvedAdministrations, began in January 2005to help inspire students and graduatesto give serious thought to starting abusiness.

5.20 A new Queen’s Award for EnterprisePromotion was announced in July 2004.The Award will recognise individualswho have made outstandingcontributions to the development andpromotion of an enterprise culture inthe UK. Recipients of the Award wereannounced in April 2005.

Working with the DWP, the InlandRevenue and others, review whatmore can be done to encourage andhelp people to move off benefits intoself-employment (interimrecommendations by July 2004).

5.21 The Routes into Self-employmentReview Board delivered its interimrecommendations in April 2004 and theGovernment’s response was issued inJuly 200410. A working group was formedto take work forward on a number offronts and a final report will be deliveredby the Review Board in spring 2005.


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9 For more information please visit www.ngce.org.uk 10 www.sbs.gov.uk/content/services/govresponse-rise.pdf

Work with the EU and otherstakeholders to ensure that the EUEntrepreneurship Action Planremoves many of the barriers andissues facing small firms in the EU.

5.22 The European Commission’sEntrepreneurship Action Plan was largelyendorsed by EU Ministers in March2004. It contains nine key actions fornear-term attention and a further five fortaking forward from 2006. The UKGovernment contributed to theformulation of ideas for the Action Planand most of the actions are in line withnational policy (though one, on taxation,is a Member State competence, not aCommission competence). The 11 MarchCompetitiveness Council conclusions onStimulating Entrepreneurship, inresponse to the Action Plan,recommended focusing on particularareas of entrepreneurship. The SBSreport of September 2004 onimplementation of the European Charterfor Small Enterprises contained detailedreports on progress within the UK on thethree priority areas of education forentrepreneurship, better legislation andregulation and improving the availabilityof skills, and on progress in other near-term Action Plan areas. In addition, theUK Government has successfullypressed the Commission to take earlyaction to examine the feasibility ofestablishing an EU Centre of Enterpriseaward scheme. The SBS has discussedthe Action Plan and the Councilconclusions at regular meetings with thefive main business support organisations.

Disadvantaged Communities andUnder-Represented Groups

Develop new and innovative businesssupport for disadvantagedcommunities and under-representedgroups through effectivemanagement of the PhoenixDevelopment Fund and abenchmarking tool for socialenterprises.

5.23 The SBS has provided support to thevalue of £30 million from the PhoenixFund11. This included £11 million for thePhoenix Development Fund. During theyear, the fund:

▼ Gave support to 26 Building on the Bestprojects12;

▼ Commissioned eight housingassociations working in Enterprise Areasto develop their business supportcapacity;

▼ Announced funding for 13 organisationsto explore innovative ways ofencouraging and supporting people withmental health conditions who wish tobecome self-employed or run their ownbusiness;

▼ Gave support for two projectsdeveloping business support forprisoners and those recently released.These projects were part of a widerinitiative by four GovernmentDepartments, including the DTI, toboost enterprise and employmentamongst offenders;

▼ Gave support to the social enterprisesector through funding for: the SocialEnterprise Visits Programme; a pilotsocial enterprise group of the Academyof Chief Executives; and the piloting of


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11 Further information about the Phoenix Fund is available from www.sbs.gov.uk/phoenix12 Listed at: www.sbs.gov.uk/content/phoenix/bobprojects.pdf

BRIAN, a diagnostic tool to measure thebusiness and social capital of individualsocial enterprises;

▼ Launched the Phoenix Bursaries inApril 2004 with funding to supportdevelopment activities in organisationsthat provide enterprise support indisadvantaged areas and/or to under-represented groups; and

▼ Built on the pilot phase for City Growth,by inviting a further ten cities/towns,covering six regions, to participate in thesecond phase which commenced inApril 2004. Eight of the cities/towns arereceiving Phoenix funding until March2006 to develop a business ledregeneration strategy andimplementation plan. A further twoareas, in London, are being funded byThe London Development Agency.

Continue to work with the CommunityDevelopment Finance Association(CDFA), the RDAs and individualCommunity Development FinanceInstitutions (CDFI) to ensure theavailability of appropriate finance toenterprises in disadvantaged areasand among under-represented groups.

5.24 Support for CDFIs through the PhoenixFund has continued with around 60Institutions across England receivingcapital and/or revenue support thatremains available to them until31 March 2006. The 2004 SpendingReview settlement included provisionfor successor arrangements to thePhoenix Fund with emphasis ondeveloping an increased level ofengagement between CDFIs and RDAs,a process which has been facilitated bythe SBS which is responsible foraccreditation of the Institutions to raiseinvestment through the CommunityInvestment Tax Relief. 23 Institutionshave been accredited and at 30September 2004 – the most recent

review point – they had raised £14.1million from 385 investors and made123 loans valued at £7.1 million usingthat capital.

Establish regional strategicpartnerships to increase the numberof women starting businesses.

5.25 All English regions are developingwomen’s enterprise. Strategicpartnerships have been formed inseveral regions. Several now haveAction Plans to develop women’senterprise and have appointed women’senterprise co-ordinators.

5.26 Additionally, all BLOs now have deliveryplans for women’s enterprise. The firstto achieve PROWESS (PromotingWomen’s Enterprise Support) flagshipstatus for delivery of women’senterprise services (BL Hertfordshire)was recognised in November 2004.

5.27 The SBS, in partnership withPROWESS, has produced and ismarketing ‘The Case for Women’sEnterprise’ – a set of practical guidelinesfor business support advisers atBusiness Link, Enterprise Agencies,banks and elsewhere. The Case, whichrelates directly to The Department/SBS’Strategic Framework for Women’sEnterprise, aims to bring additionalgender focus to government-sponsoredsupport provision to womenentrepreneurs.

5.28 At the request of the Chancellor of theExchequer and the Secretary of Statefor Trade and Industry, an advisoryWomen’s Enterprise Panel has beenestablished. Additionally, the SBS issupporting a public relations campaignto raise awareness at individual andorganisational levels of the economicbenefit afforded by women’s enterprise.


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Social Enterprise

Implement the Government’s SocialEnterprise Strategy13, includingimplementation and subsequent fulluse of the Community InterestCompany legislation, by July 2005.

5.29 Social enterprises are businesses thatoffer economically sustainable businesssolutions to a variety of market andsocial issues. As well as creatingeconomic value through their ownactivities, they also help to create newmarkets, goods and services, all ofwhich have a positive effect onmainstream business. The Departmentgave almost £1 million support towardsactivity to promote the growth anddevelopment of the social enterprisesector in 2004/05.

5.30 Highlights of the progress that has beenmade on implementing theGovernment’s three-year strategy forsocial enterprise include the inclusion inthe Companies (Audit, Investigationsand Community Enterprise) Act 2004 ofa new form of company designed tomeet the needs of some socialenterprises, the Community InterestCompany, and the appointment of aRegulator.

5.31 In May 2004, the Department published‘Lending to Social Enterprise’ whichprovided a series of case studies toillustrate to lenders the possibilities oflending to the sector.

5.32 The SBS’s Business Plan includes acommitment to promote socialenterprise as an alternative businessmodel and to understand and serve thesupport needs of the sector. In January2005 the SBS sponsored the SocialEnterprise Coalition’s first nationalconference: Social enterprise solutions

to 21st century challenges. The maintheme of the conference was thegrowth of social enterprise.

Access to Finance

Continue to operate the Small FirmsLoan Guarantee, while alsoundertaking a review (summer 2004)to ensure we are doing all we can tohelp small firms overcome obstaclesto raising debt finance.

5.33 The take up of the Small Firms LoanGuarantee continued to increasefollowing the April 2003 changes, whichequalised the guarantee rate at 75% forall loans and widened the range ofeligible business sectors. The totalnumber of loans guaranteed from April2004 to January 2005 was 6,021. Theaverage loan value was £67,355. Twonew lenders joined during the year,contributing to the ongoing objective ofwidening the availability and accessibilityof loans to appropriate businesses.

5.34 The independent Graham review,commissioned by the Chancellor of theExchequer and the Secretary of Statefor Trade and Industry, reported inOctober 2004 and made a number ofwide-reaching recommendations thatuse of the Loan Guarantee be focusedon young businesses in their first threeyears of trading and the administrationof individual loans be devolved fully tothe lenders, with the SBS negotiating anannual lending allocation with eachlender monitoring performance throughan audit process. The Government hasaccepted these proposals and work toimplement them is in hand.


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13 www.sbs.gov.uk/socialenterprise

Develop an Enterprise Capital Fund(ECF) programme to increase theavailability of growth capital to smallbusinesses affected by the equity gap.

5.35 The ECF programme was subject toan open scrutiny procedure by theEuropean Commission in 2004.Following this procedure theGovernment is awaiting a final decisionon approval of the programme from theCommission. In the interim it publisheddraft bidding guidance to give potentialbidders an indication of the informationthey will need when a pathfinderbidding round is launched.

5.36 The Government is establishing theFinance for Investment Advisory Boardto provide expert advice on theimplementation of the pathfinder roundof ECFs and taking forward the GrahamReview recommendations for the SmallFirms Loan Guarantee. The AdvisoryBoard will be established during 2005and if the pathfinder round of ECFsdemonstrates the viability of a long-termECF programme the Government wouldseek to establish an arm’s lengthdelivery company that would take overthe role of the advisory panel.

Support continued investment by theRegional Venture Capital Funds, EarlyGrowth Funds and the BridgesCommunity Development VentureFund to help small firms access thegrowth capital they need.

5.37 Investment has continued in highgrowth companies throughout the yearacross all of the English regions. Detailsof investments to the end of December2004 are:

▼ Regional Venture Capital Funds£41.9 million;

▼ Early Growth Funds £20.9 million14; and

▼ Bridges Community DevelopmentVenture Fund £10.3 million.

Work with the RDAs and GovernmentOffices to align regional and nationalpriorities in addressing marketfailures and ensure the tax andregulatory frameworks supportaccess to finance.

5.38 The SBS has worked closely with RDAs,Government Offices and otherGovernment Departments to alignregional and national priorities inaddressing market failures in the provisionof finance to small business. The RDAs


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14 EGFs themselves have invested £3.93 million. The funds have also levered in £16.92m alongside their investment.

2001/02 2002/03 2003/04Outturn Outturn Working

Provision

Loans guaranteed 4,269 3,916 4,723

Value (£ million) 254.7 269 313

Average Loan Size (£) 59,660 68,810 66,271

Demands against guarantee 1,629 1,690 1516

Value (£ million) 44.93 50 45.8

Average default (£) 27,581 29,836 30,186

Receipts (£ million) 9.31 9.48 13.45

Net cost (£ million) 35.62 40.52 32.35

Provision (£ million) 86.20 116.29 116.29

Small Firms Loan Guarantee SchemeFigure 5.1:

and the SBS have established an Accessto Finance Forum to share good practiceand ensure that regional and nationalactivities are better understood.

5.39 In addition, the SBS has worked closelywith the Small Business InvestmentTaskforce to ensure that the tax andregulatory regimes support access tofinance. The Taskforce has made anumber of recommendations to theGovernment to improve the fiscalregime and were closely involved in HMTreasury’s consultation on makingchanges to the Financial PromotionOrder to improve the environment forBusiness Angels and other high networth investors. Changes to the Orderwere announced by the Chancellor inthe Pre-Budget Report 2004.

Prepare a no-nonsense guide toaccess to finance for small businesses.

5.40 In January 2005 the SBS published the‘No-Nonsense Guide to Small BusinessFunding’15 and the ‘No-Nonsense Guideto Finance for High GrowthCompanies’16. Publication wassupported by a national advertisingcampaign and by February 2005 over38,000 copies had been distributed.

Grant for Research and Development

5.41 Grant for Research and Developmenthas been available since June 2003.Grants of up to £500,000 – dependingon the type of project undertaken – areavailable to help individuals and smallbusinesses research and developtechnologically innovative products andprocesses. On 1 April 2005,responsibility for delivering Grant forResearch and Development in Englandtransferred to the RDAs.

Launch Investment

Manage the Launch Investmentbusiness portfolio effectively, aimingto maximise revenues.

5.42 The Department continues to closelymonitor the progress of the aerospaceprojects that have been supportedthrough Launch Investment and continuesto maintain a sound knowledge of themarket. The Department is conducting avaluation of the Launch Investmentportfolio, as at 31 March 2004.


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2002/03 2003/04 2004/05 2005/06 2006/07outturn outturn Working plans plans

Provision

Smart/Grant for R&D 32.1 47.0 36.0 27.0 27.0

Enterprise Grant successor grant17 11.9 13.6 0.0 0.0 0.0

SMART and Enterprise Grant expenditure in England (£ million)Figure 5.2:

15 The Department of Trade and Industry, No-nonsense Guide to Small Business Funding, January 2005 (Available fromwww.sbs.gov.uk/content/finance/smefundingnng.pdf)

16 The Department of Trade and Industry, No-nonsense Guide to Finance for High-Growth companies, January 2005 (Available fromwww.sbs.gov.uk/content/finance/financehgsmenng.pdf)

17 From 1 April 2004 a new business support product, Selective Finance for Investment in England, was launched to replace Regional SelectiveAssistance and Enterprise Grants in the Assisted Areas. Please see figure 6.3 in Chapter 6 ‘Strengthening Regional Economies’ for expenditureplans for SFIE


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2002/03 2003/04 2004/05 2005/06 2006/07outturn Working plans plans plans

Provision

Total (excl Launch Aid) 141.4 190.6 190.4 227.9 233.8

of which:Access and Support to Implement Best Practice Products 0 11.0 11.0 11.0 11.0

BLU 1.5 1.9 1.9 1.9 1.9

Business.gov 8.9 15.0 20.0 15.0 15.0

Gateway – Capital Grants 5.1 8.0 8.0 8.0 8.0

Gateway – Resource 3.7 3.3 4.3 3.3 3.3

Design Council 6.9 7.1 7.0 6.3 6.3

Enterprise Fund. Including Enterprise Captial Fund 83.8 108.6 92.5 146.5 161.5

of which:Programme including Small Firms Loan Guarantee 60.7 74.0 75.5 94.5 100.5

Capital 23.1 34.6 17.0 52.0 61.0

Manufacturing Advisory Service19 0 0 0 1.0 1.0

National Business Link Marketing20 3.0 4.0 5.0 3.0 3.0

Phoenix Fund 25.4 26.0 25.0 19.0 13.0

Promotion of Enterprise 1.1 3.6 5.8 3.3 3.3

Research and Evaluationof which: 1.1 1.1 1.1 1.1 1.1

Social Enterprise 0.9 1.0 1.0 1.0 1.0

Legacy Programmes21 0 0 9.2 9.2 6.2

Aerospace Launch Investment 218.0 -106.8 -158.3 -158.3 -158.3

of which:capital 323.6 22.0 0.0 0.0 0.0

Expert Advice and other programme 2.9 1.1 1.0 1.0 1.0

Receipts (excluding CFERs) -20.9 -33.6 -43.4 -43.4 -43.4

Total Receipts -108.5 -129.9 -159.3 -159.3 -159.3

Expenditure on Enterprise, Growth and Business Investment (£ million)18Figure 5.3:

18 All figures rounded to nearest £100k.19 This money will ensure MAS can continue in Wales.20 Formerly SBS Marketing.21 Budget to meet commitments for programmes which have now ended.

Introduction

Our challenge is to strengthenregional economies throughsustainable improvements in theeconomic performance of all Englishregions and close the gap in growthrates between the regions.

6.1 The prosperity of the UK economy isdependent on strong regional and localeconomies. Economic performance (interms of productivity and employment)varies across and within areas of theUK. These differences are deeply rootedand have persisted for most of the lastcentury and the intra-regional disparitiesmake the UK different from otherEuropean countries. Bringing GrossValue Added (GVA) per head in theunder-performing regions up to theEnglish average would increase activityin the economy by approximately £60billion each year.

6.2 The DTI, together with HM Treasuryand the ODPM, has continued todevelop the evidence base fortackling performance differentials inemployment and the five drivers of

productivity – skills, investment,infrastructure, enterprise andcompetition. In February 2005 theprogramme to take forward this workwas captured in the publication‘Realising the potential of all ourregions’ (see paragraph 6.10 belowfor further detail).

Plans for 2005/06

6.3 Many of the Department’s activities,notably in regard to innovation andenterprise, support our commitment tostrengthening regional economies. TheDTI’s Business Plan 2005-081 sets outour plans for strengthening regionaleconomies including the delivery of PSA

target 72. We will:

▼ Work with the Regional DevelopmentAgencies (RDAs), Government Officesand other Government Departments tomake sustainable improvements in theeconomic performance of all the Englishregions by 2008 and close the gap ingrowth rates between them;

▼ Work in partnership with the RDAs sothey are more engaged in DTI policyformulation, policy is led at the

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Chapter 6

Strengthening RegionalEconomies

Introduction

Plans for 2005/06


Promoting the Regional AgendaRegional AssistanceInfluencing Other Government DepartmentsEngland’s Regional Development Agencies


2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_7.pdf

appropriate level (either national orregional), and decisions are taken onboth policy and delivery informed bynational, regional and sub-regionalneeds; and

▼ Make the most cost-effective use of EUStructural Funds by maximising take upof current Structural Fund programmesand securing agreement on new EUregulations in line with UK objectives forreform.


The things we said we would do in theDTI Business Plan 2004-073 are groupedby topic area below with a narrativecovering our achievements in 2004/05.

Promoting the Regional Agenda

Implement the new approach totasking the RDAs, review the waythey are funded and performancemonitored and continue to improvethe diversity and quality of applicantsfor RDA Chair and other Boardappointments.

6.4 A new Tasking Framework, agreedbetween central government and theRDAs, was published in February 2005and came into effect from April 20054.The purpose of the Framework is tohelp Departments and the Agencieswork on regional priorities in a way thatalso serves national interests moreeffectively. The Framework specifiescertain requirements in relation to theRDAs’ Corporate Plans for 2005-2008,including a requirement to increase

Strengthening Regional Economies

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PRIORITY ACTION 2004/05: Raise national and regional economic performance by

working more effectively with the RDAs and other regional bodies.

Following its launch on 2 March 2004, the DTI has taken forward work on the NationalRegional Partnership Programme aimed at developing a closer working relationship with theRDAs. More specifically the Programme aims to embed the regions/regional issues moredeeply in DTI’s policies and processes so the RDAs are more engaged in DTI policyformulation and DTI in that of the RDAs, policy is led at an appropriate level (national orregional), and decisions are taken on both policy and delivery informed by national, regionaland sub-regional needs.

The Programme is focused on four key policy areas – innovation, enterprise, energy andinternational trade and inward investment – where partnership working is already having animpact even though still in its relatively early stages. During 2004/05 there were jointDTI/RDA senior level events on energy and innovation; joint action plans were agreed withthe RDAs in the areas of business relations and international trade and inward investment;and the Business Link Strategy Board and the National Regional Business Support Boardwere established, both with joint DTI/RDA membership.

In addition work is ongoing to establish the infrastructure to support effective partnershipworking. For example, we have put in place structured programme management arrangementsto monitor and report progress and provide challenge, we have scoped the information sharingrequirements across DTI, the Government Offices and the RDAs to help establish effectivecommunications systems, and we have agreed the process for engagement with the RDAs onDTI’s input to those Regional Economic Strategies due for review in 2005.

3 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf4 Available from www.dti.gov.uk/rda/info/Tasking_Framework.htm

collaborations between business andthe UK knowledge base. RDAs’Corporate Plans will be published in2005. Work is continuing on thedevelopment of a new approach tomonitoring the RDAs’ performance indelivering their Corporate Plans andhelping the RDAs to improve theirperformance. The intention is that thisshould be more transparent andefficient than the current arrangementsand that it should entail greater relianceon internal and independent audit.Details will be published in 2005.

6.5 Following the 2004 Spending Reviewsettlement a review was carried out ofthe formula by which the RDAs receivetheir funding. Details of the funding tobe allocated to each RDA for 2005/06,2006/07 and 2007/08 were announcedin February 2005.

6.6 In 2004, Ministers appointed a newChair for the East MidlandsDevelopment Agency together with 30other new Board members across theeight RDAs outside London.

Work with the rest of DTI to enableregional Government Offices (GOs) toplay their part in implementing theDTI Strategy and Business Plan.

6.7 The GOs in the English regions,managed by the Regional Co-ordinationUnit in ODPM, provide a regionalnetwork for many central GovernmentDepartments, including the DTI.Implementation of the Performance andInnovation Unit’s report “ReachingOut”5 has broadened the role of theGOs, increasing their impact with theirWhitehall parent departments, andimproving co-ordination in Whitehallbetween different GovernmentDepartments that have a regional orlocal impact.

6.8 The DTI uses GOs to support itsobjectives, by placing reliance on themto provide a regional perspective andshare their experience in workingclosely with other Departments’agendas. The key focus of GOs, from aDTI perspective, is on supporting andjoining up partnerships and initiativesfrom across government that promoteregional economic growth. Asgovernment in the regions, the GOsprovide impartial reporting on theperformance of the RDAs, helping tomaximise their impact on regionaleconomic performance. GOs alsoinfluence policy development in theDTI and other central GovernmentDepartments, provide regionalintelligence and implement most of theEU Structural Fund Programmes inEngland.

Drive forward regional developmentacross DTI and with GOs and RDAs.

6.9 The Government’s approach toimproving regional performance is tosupport and strengthen regionalleadership, empower the regions togenerate their own solutions in the lightof their particular strengths andweaknesses and ensure the optimum fitbetween national and regional policies.England’s RDAs and the GOs are centralto this process and the Departmentworks with them to ensure that theyfulfil their remit as effectively aspossible. It also works to ensure thatchanges in European regional policy,including the enlargement of the EU,are aligned to the regional developmentof the UK.

6.10 A two part description of the programmeto deliver the Regional EconomicPerformance (REP) PSA ‘Realising thePotential of all our Regions: The Way


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5 Available from www.number-10.gov.uk/su/reaching/regions/default.htm

Forward and The Story So Far’ waspublished in February 20056,complementing the earlier publication ofthe evidence base work by FrontierEconomics. Between them thesedocuments describe the work necessaryto tackle the underlying weaknesses inregional economic performance – payingparticular attention to disparities inemployment and skills levels butrecognising that action is necessary onall the drivers of productivity – includingenterprise and innovation where DTIleads. The REP PSA is formally ownedby DTI, ODPM and HM Treasury but,following the 2004 Spending Review,other key departments notably DWP,DfES and the Department for Transporthave been much more actively engagedin the work.

Regional Assistance

With the RDAs, implement the newsupport product for investment inAssisted Areas.

6.11 On 1 April 2004, following a review ofall DTI business support schemes, anew business support product,Selective Finance for Investment in

England (SFIE) was launched to replaceRegional Selective Assistance (RSA) andEnterprise Grants (EG) in the AssistedAreas. A similar but necessarily morelimited form of selective financialassistance has replaced the EG schemein “Tier 3” areas. The new product aimsto improve productivity and raise skilllevels, and builds on the key existingcriteria for the creation of sustainablequality employment.

6.12 SFIE, like RSA, is largely deliveredthrough the RDAs with the appraisalof only the largest cases (grants ofover £2 million) undertaken by theDepartment. If the take-up of thenew product continues to accelerate asin the first two quarters, we expect atotal of £70 million of offers to be madein 2004/05 with spend of £4.5 million.This figure is expected to grow steadilyover the next few years as it replacesthe residual spending on existing RSAprojects. Future spending on theprogramme is however also likely to beaffected by the outcome of theEuropean Commission (EC) review ofregional aid which will come in to effectat the end of 20067.


91

6 www.odpm.gov.uk/stellent/groups/odpm_communities/documents/divisionhomepage/034899.hcsp7 Further info about SFIE is available from www.dti.gov.uk/support/rsajf2512001.htm

0

5

10

15

20

25

30

35

40

York &

Humberside

West

Midlands

South WestSouth EastNorth WestNorth EastLondonEast

Midlands

East

£ m

illi

on

Expected SFIE/RSA expenditure for 2004/05 by region Figure 6.1:

6.13 Projects receiving offers of grant in theEnglish regions during the year include:£5 million to Getrag Ford for a new six-speed transmissions plant at Halewoodsecuring 736 jobs; and £16.5 million toHuntsman to establish a polyethyleneplant in Teesside creating 117 new jobsand securing a further 747.

Negotiate for the UK on the EC’sproposed Regulations for StructuralFunds after 2006 and overseen theimplementation of currentprogrammes to avoid loss of EUfunds.

6.14 The DTI is responsible for co-ordinatingUK policy on the European StructuralFunds and implementation of the Fundsat the UK level. The Funds aim topromote regional economic developmentthrough support for business, researchand development, innovation,regeneration and skills and training.

6.15 Current Structural Funds programmeslast until 2006. In July 2004 the ECpublished a package of draft StructuralFunds regulations for the period 2007-13. Discussions on these regulationsare now underway in the EU Councilof Ministers.

6.16 The proposed approach to reform of theEU Structural Funds agreed by Ministersin 2003 provides the basis for the UKposition in these negotiations. Underthis approach, which was confirmed bythe Secretary of State in statements toParliament in September and December2003, EU Member States would agree aset of common, outcome-focusedobjectives for economic and socialcohesion, based on the priorities set atthe Lisbon European Council of March2000. However, more prosperousMember States, such as the UK, wouldin future fund their own regional policy

with EU resources concentrated on thepoorer Member States. Further detailsof the Government’s objectives forreform are set out in the 2003Parliamentary statements.

6.17 For the period from 2000 to 2006, theUK has Structural Funds allocations of€16.6 billion (approximately £10.7 billionat 1999 exchange rates). The StructuralFunds Regulations require individualprogrammes to meet annual expendituretargets in order to avoid loss of funding.In 2004, with the exception of smallunder-spends in some of the fisheriesprogrammes, all targets were met.

Influencing Other GovernmentDepartments

Work in partnership with theDepartment for Transport, ODPM andother relevant bodies to ensuretransport policy decisions and land-use planning reform meet the needsof business.

6.18 During 2004/05, the Departmentsuccessfully contributed to the newTransport White Paper8. In addition wewere strongly engaged in the work toachieve better alignment at the regionallevel of priorities for transport, housingand economic development.A consultation document on regionalfunding allocations and longer termplanning assumptions was publishedalongside the Pre Budget Report inDecember 2004. The DTI has alsocontributed to the ODPM review ofPlanning Policy Statement 1: DeliveringSustainable development9.


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8 The Future of Transport: a network for 2030, Department for Transport in July 20049 www.odpm.gov.uk/stellent/groups/odpm_control/documents/contentservertemplate/odpm_index.hcst?n=5845&l=3

England’s RDAs10

6.19 The DTI sponsors the RDAs in theEnglish regions, whose mission is totransform the regions throughsustainable economic development.

6.20 The RDAs’ statutory areas ofresponsibility include economicdevelopment and regeneration,promoting business efficiency,investment and competitiveness,promoting employment and skillsdevelopment, and contributing tosustainable development in the UK.In fulfilling these responsibilities theRDAs work in partnership with a rangeof Departments and are helping to takeforward a range of national policyinitiatives in ways which are relevant tothe Regional Economic Strategies.The RDAs draw up and implement theRegional Economic Strategies inpartnership with key local and regionalpartners and stakeholders.

6.21 The Spending Review of 2004 led to anexpanded brief for the RDAs. From April2005, RDAs took on responsibility forthe Business Link network from the DTISmall Business Service and a broader

remit for regeneration in rural areas.They are also taking the lead in pursuingthe recommendations of the Lambertreview of Business-UniversityCollaboration. The Department isworking with the RDAs through the jointBusiness Link Strategy Board on aperformance framework for delivery ofBusiness Link services in 2005/06.

RDA Achievements in 2004/0511

▼ Established Regional Skills Partnershipsacross England;

▼ Exceeded the target for brown-field landbrought back into use;

▼ Brought £677 million of privateinvestment into deprived areas;

▼ Created more opportunities for peopleto learn new skills than in any previousyear;

▼ Worked in partnership to developgrowth strategies, e.g. the NorthernWay, a strategy launched by OneNorthEast, Yorkshire Forward and theNorthwest RDA which aims to unlockthe economic potential of the North;and


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2004/05 2005/06 2006/07 2007/08 Budget Plans Plans Plans

Advantage West Midlands 235 274 285 293

East England Development Agency 91 131 135 138

East Midlands Development Agency 138 157 164 168

London Development Agency 327 374 392 401

North West Development Agency 365 384 402 410

One North East 226 241 253 260

South East England Development Agency 128 159 164 168

South West of England Development Agency 111 154 161 165

Yorkshire Forward 284 297 311 318

Reserve 28 0 0 0

TOTAL 1,933 2,171 2,267 2,321

Total Government funding for RDAs (£ million)Figure 6.2:

10 For further information on RDAs, including corporate plans etc, please visit www.dti.gov.uk/rda/info/index.htm11 For further details on the achievements of individual RDAs please visit: www.englandsrdas.com/home , or www.nwda.co.uk, www.seeda.co.uk,

www.onenortheast.co.uk, www.southwestrda.org.uk, www.wmda.co.uk, www.eeda.org.uk, www.emda.org.uk, www.yorkshire-forward.com andwww.ida.gov.uk

▼ Worked on landmark physicalregeneration projects, e.g LondonDevelopment Agency published aframework for the Thames Gatewayarea that sets out how 91,000 newhomes could be built in the area by2016, supported by open spaces,infrastructure and services.


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2003/04 2004/05 2005/06 2006/07 2007/08Outturn2 Working Plans Plans Plans

Provision

Total 589.2 655.3 645.7 712.3 540.9

of which:RSA/Selective Finance for Investment in England12 15.4 55.0 50.0 35.0 35.0

EG/Enterprise Grants 13.6 0.0 0.0 0.0 0.0

RDA Single Pot 230.1 319.7 484.9 497.9 505.9

ERDF expenditure13 302.6 280.5 63.8 177.9 177.914

Rover Task Force15 20.9 10.7 14.6 0.0 0.0

University Innovation Centres 6.6 13.5 8.3 1.5 0.0

DTI/UK Trade & Investment expenditure on Strengthening Regional

economies (£ million)Figure 6.3:

12 With effect from 1 April 2004, RSA transferred to new product SFIE.13 ERDF Agency payments are recorded on the ODPM Request for Resources.14 The allocation of Structural Funds in the United Kingdom for the 2007-2013 Programming period will not be known until the end of 2005 at the

earliest, therefore £177.9 million represents expenditure on the current programme 2000-2006.15 To be funded from end-year flexibility.

Introduction

Our challenge is to enhance thecompetitiveness of companies in theUK through overseas trade andinvestments; and ensure a continuinghigh level of quality foreign directinvestment.

7.1 UK Trade & Investment has leadresponsibility within government for tradeand investment services. It brings togetherthe work of the Foreign andCommonwealth Office (FCO) and DTI insupporting both companies in the UK tradeinternationally and overseas enterprisesseeking to locate in the UK. UK Trade &Investment shares its objective and PSAtarget with the FCO and the DTI1.

7.2 The 2004 Spending Review settlementsignalled a 12% reduction in resourcesfor UK Trade & Investment over theperiod 2005-08. It also signalled a shiftin the balance of work towards inwardinvestment, from 15% of currentresources to 33% by 2008; a decisionon the exact split will be influenced bythe outcome of a study into the relativebenefits of spending resources oninward investment as opposed to trade.The settlement will also increase by 30percentage points the proportion oftrade support resources going to helpnew-to-export small and medium sizedenterprises (SMEs).

7.3 The settlement has given greaterimpetus to implementing UK Trade &Investment’s existing Strategy 2006,which has been in place since 2002/03and commits UK Trade & Investment toputting more of its resources closer toits customers. By 2008, UK Trade &Investment will be putting £26m a yearinto the English regions – over £13mmore than in 2002/03. This will meanlooking critically at the support UK Trade& Investment can deploy in other areas,sharpening its focus on those sectors ofindustry where it can add most value,and on those countries where somelevel of UK Government support isneeded for UK companies to succeed.Services will be delivered through thirdparties, such as trade associations,where it is appropriate to do so andwhere possible on a commercial basis.Support for overseas exhibitions andmissions for 2006/07 and beyond willput greater emphasis on new-to-exportcompanies, especially SMEs, and activefollow-up of those attending theseevents.

Plans for 2005/06

7.4 The DTI’s Business Plan 2005-082 setsout plans to increase trade andinvestment including the delivery ofPSA target 83. Through the work of UKTrade & Investment we will:

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Chapter 7

UK Trade & InvestmentIntroduction

Plans for 2005/06


Winning Business in International MarketsInward Investment

1 For further information on UK Trade & Investment please visit www.uktradeinvest.gov.uk2 www.dti.gov.uk/about/dti-businessplan-2004-08.pdf. Summaries of delivery plans can be found at www.dti.gov.uk/about/dti-businessplan-2004-08-

summary.pdf3 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_8.pdf

▼ Encourage and support companies of allsizes to improve their internationalbusiness performance with a particularemphasis on ensuring that Governmentresources are targeted at new-to-exportfirms; and

▼ Continue to work to attract foreigninvestment into the UK and furtherimprove the UK’s position as the leadingEU recipient of foreign directinvestment, particularly in knowledge-driven sectors.


7.5 The work of UK Trade & Investmentwas covered by the Improving BusinessPerformance objective from the DTIBusiness Plan 2004-07. From 2005 itwill be covered by this new objectivewhich is better aligned with PSA 11.The following is a report onperformance in the two main areas ofwork for UK Trade & Investment:winning business in internationalmarkets and inward investment. UKTrade & Investment’s performance in2004/05 is described in more detail inthe UK Trade & InvestmentDepartmental Report 2005.

Winning Business in InternationalMarkets

Information and support for UKcompanies

7.6 In 2004 UK Trade & Investment’sheadquarters-based enquiry servicehandled 38,851 telephone calls and over6,000 emails, whilst its InformationCentre received over 3,500 visitors.

7.7 UK Trade & Investment providessupport for UK companies to attendexhibitions, seminars and sector-focused trade missions through its

Support for Exhibitions and SeminarsAbroad scheme. In 2004/05 UK Trade &Investment helped more than 8,000exhibitors to attend 500 overseasexhibitions, 610 business delegates toattend 110 seminars, and around 1,200business participations in 143 overseassector focused missions.

Delivering customer focused services

7.8 UK Trade & Investment’s newinteractive website4 was launched inSeptember 2004. Using portaltechnology, UK customers can getinformation directly relevant to theirinterests, on trading and investingoverseas. It also provides information tooverseas investors about investing inthe UK. Other services include aninteractive diagnostic tool on exportreadiness, and requesting and payingonline for bespoke market research andother in-market assistance in 30countries. The range of onlineinformation and services will bedeveloped further during 2005. So far,the portal has delivered savings of£1.7 million.

7.9 A pilot web-based customer relationshipmanagement (CRM) system, used byUK Trade & Investment staff working oninward investment in headquarters inLondon and in Germany, started inSeptember 2004. Subject to theoutcome of the pilot, this is due to beextended in 2005 to one of the Englishregions to gauge the feasibility ofsupporting services for exporters.

Trade support services

7.10 UK Trade & Investment has simplifiedthe trade support it offers and isdelivering a revised portfolio of servicesunder three categories of help, based


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4 www.uktradeinvest.gov.uk/ukti/appmanager/ukti/splash

on a simple ‘customer journey’ throughthe process of doing businessinternationally:

▼ Advice and Support – includes guidancefrom locally based International TradeAdvisers, to help companies diagnosetheir needs and develop an action planfor sustainable success in overseasmarkets; the ‘Passport to Export’Programme; and tailored advice ondoing business abroad.

▼ Information and Opportunities – a rangeof tools to help companies gatherinformation on target markets andmatch products with the right buyers;and

▼ Making it Happen – practical assistancefor visiting markets, including help forgroups of companies attending trademissions and trade fairs overseas; andon-the-ground support from TradeDevelopment Officers based in the UK’sEmbassies, High Commissions andConsulates in key markets around theworld.

7.11 These services aim to help companiesbuild the capacity they need to succeedin doing business overseas, and can betailored to the needs of individualbusiness customers. UK Trade &Investment will look to recover more ofits costs through charging for theseservices.

The Passport Programme

7.12 UK Trade & Investment’s ‘Passport toExport Success’ trade developmentprogramme is the main route fordelivering services to new-to-exportcompanies. ‘Passport’ provides targetedadvice, support and training to helpcompanies help themselves in buildingthe capacity – the people skills and

business systems – they need to dobusiness overseas successfully.‘Passport’ is delivered throughout theregions by International Trade Advisers,most of who have businessbackgrounds themselves andunderstand the additional challengescompanies face in doing businessoverseas. As at end-October 2004,around 3,000 firms are on theprogramme and over 1,000 havecompleted the process.

Global partnerships

7.13 The Global Entrepreneurs programme5

and the Global Partnerships scheme6

were further developed during the yearand both have made encouragingheadway. The Global Entrepreneursprogramme, launched in January 2003,aims to make the UK a more welcomingcountry for entrepreneurs and start-upsinvolved in key knowledge basedsectors, such as ICT and life sciences.During the year UK Trade & Investmenthelped 14 new start-ups in thenanotechnology, bioinformatics andsoftware sectors.

7.14 The Global Partnerships scheme, startedin March 2003, helps UK based andforeign companies collaborate, inparticular on technology development,by helping with the crucial partnersearch process. During the year, UKTrade & Investment was involved innine of these new partnerships.

Inward Investment

7.15 UK Trade & Investment is leading thedevelopment of an improved approachto managing those inward investors thatare not covered by DTI’s strategicrelationship management programme.The aim is to better integrate the


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5 www.invest.uktradeinvest.gov.uk/entrepreneur/6 Further information at

www.investuk.gov.uk/wwEurope/site_fra/uploads/pdfs/Global%20Partnerships%20Programme%20%28Nov%202004%29%2Epdf

various points of contact companieshave with publicly-funded organisationsinvolved in promoting inwardinvestment – regionally across the UK,nationally, and internationally withEuropean HQ and Parent companycontacts.

7.16 In partnership with DTI, UK Trade &Investment will continue to lobby onissues that concern investors. UK Trade& Investment is developing further its‘Voice in Government’ offer to existinginvestors, acting as an advocate inWhitehall for investors on issues thatmay place the UK at a disadvantagecompared to competitor markets, andon company specific issues that impedethe growth and development ofinvestors’ operations in the UK. Much ofthe information essential for this activityis received from the UK regionalnetwork. UK Trade & Investment isworking with the RDAs and theDevolved Administrations to helpdevelop a better understanding of theinvestment ‘drivers’ such as planning,transport infrastructure and skillsavailability.

Inward investment successes

7.17 The UK has a strong – and enviable –track record in attracting inwardinvestment. 2003/04 was anothersuccessful year, with UK Trade &Investment recording 8137 decisions toinvest in the UK – an increase of 12%on the previous year – with 59,614associated jobs, of which 25,614 werenew jobs.

7.18 Manufacturing projects accounted foralmost 32% of the total number ofprojects and almost 39% of the newjobs, while service projects accountedfor 37% of projects and almost 40% ofnew jobs. Expansion by existinginvestors made up 35.1% of the totalnumber of investments with 286projects, demonstrating the importanceof working closely with existinginvestors to help maintain and developtheir presence, while 41.5%, or 338were new projects.


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7 UKTI successes figures for 2003/04 have been revised since the publication of the UK Inward Investment 2003/04 Report by UK Trade and Investment8 From 1 April 2004, missions were split into vertical (sector specific) and horizontal missions. Vertical missions are now included in International

Business Schemes (formerly Support for Exhibitions and Seminars Abroad).9 As from 1 April 2004 inward missions are the responsibility of the individual UK Trade & Investment sector teams. They will support these missions

from their programme expenditure.10 The provision of International Business Schemes support is currently under review. It is not possible to determine what the results of the review

will be or forecast possible participant numbers until that review is completed.

2002/03 2003/04 2004/05 2005/06 2006/07outturn outturn Working plans plans

Provision

Exhibitions 8,592 7,965 8,010 8,000 10

Overseas Seminars 406 316 610 400 10

Outward Missions 3,000 4,445

Vertical Missions 1,2008 1,200 10

Horizontal Missions 1,492

Inward Missions (number of visitors) 540 550 9 9 9

Number of Participants supported at exhibitions, missions and seminarsFigure 7.1:


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1999/00 2000/01 2001/02 2002/03 2003/04


Number of active cases 604 1,115 1,103 1,147 1,464

Number of inward investment decisions in which UK Trade & Investment was significantly involved 145 245 165 147 280

Number of new jobs created 15,519 15,976 4,329 5,426 5,548

Number of jobs safeguarded 6,704 6,589 1,252 3,077 1,758

NATIONAL FIGURES

Number of inward investment decisions 800 880 843 717 813

Number of new jobs created 54,365 71,168 35,359 34,624 25,614

Number of jobs safeguarded 81,587 52,359 23,961 20,265 34,000

Inward Investment cases and effect on jobs11Figure 7.2:

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08outturn13 outturn Working plans14 plans14 plans14

Provision

Trade development 71.5 75.9 75.3 73.0 61.7 51.1

of whichSupport for exhibitions and seminars 21.6 19.2 19.0 16.0 10.0 10.0

Passport 3.6 5.4 5.5 6.2 6.6 6.7

International Trade Advisors 9.8 10.9 14.6 15.9 16.7 17.0

Overseas Project Fund 2.4 2.4 1.2 0.4 0.1 0

Sector Support in Markets 4.2 10.9 11.9 11.9 9.0 9.0

Outward Missions 2.2 1.8 1.3 0.3 0 0

Export Promoters 2.6 2.4 2.2 1.8 1.0 1.0

Sales Lead Services15 1.7 1.4 0.4 0 0 0

Income -0.9 -1.3 -1.6 -1.4 -1.5 1.6

Inward Investment 20.7 20.7 23.8 27.3 33.8 38.4

of whichGrants to RDAs 12.9 12.9 13.2 15.2 15.2+ 15.2+

Promotional expenditure 7.8 6.6 8.3 11.1 11.7 12.4

UK Trade & Investment Programme Expenditure: Major Programmes

(£ million)12Figure 7.3:

11 The figures above reflect updated data received since previous Departmental Reports.12 This is not a comprehensive list of all UK Trade & Investment funded programmes, but includes the main areas of spend only. All figures to nearest

£100k.13 2002/03 outturn figures quoted in the 2004 Departmental Report were provisional 14 Figures are indicative only.15 Sales Lead Services has been incorporated as Business Opportunities features on the UK Trade & Investment corporate trade website at

www.uktradeinvest.gov.uk


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2002/03 2003/04 2004/05 2005/06 2006/07 2007/08outturn outturn Working plans17 plans17 plans17

Provision

Expenditure 93.1 97.9 102.6 101.7 97 90.6

Income -0.9 -1.2 -1.6 -1.4 -1.5 -1.6

Net 92.2 96.6 101.1 100.3 95.5 89.5

Expenditure on Trade & Investment (£ million)16Figure 7.4:

16 All figures to nearest £100k.17 Figures are indicative only.

Introduction

8.1 Working with industry and key partnersin the regions and elsewhere, the DTIhas continued to develop a highlyeffective two-way communicationschannel that enables robust policy-making by ensuring that the businessvoice is heard. It has further enhancedits strong relationships with and expertknowledge of key companies andintermediaries with the aim ofinfluencing the corporate strategy andperformance of the rest of their sector.

Plans for 2005/06

8.2 The DTI’s Business Plan 2005-081 setsout our plans to build and sustaineffective channels with business. Wewill maintain strong relationships withkey companies and intermediaries to:

▼ Ensure DTI’s nine business supportproducts bring real economic impact,are accessible in a customer-friendlyway and are delivered effectively;

▼ Complete ten sector competitivenessanalyses by March 2006, using highquality sectoral analysis to increase the

number of: (i) informed and thusefficient business; and (ii) effective, andbusiness-supported, governmentintervention; and

▼ Fully participate in the joint industry/TUC/government Manufacturing Forum,whose remit will include: the image ofmanufacturing; innovation; managementleadership skills and women inengineering/manufacturing; and publicprocurement.


8.3 The work covered by Effective Channelswith Business was previously spreadacross a number of other objectives andhas been brought together to focus ourefforts on co-operation with keystakeholders. The benefits of suchco-operation are outlined in theexamples below.

Innovation and Growth Teams (IGTs)

8.4 These cross-functional, time limitedteams, have a broad membership drawnfrom industry, Government and othermajor stakeholders. The IGT approach oflooking strategically at a specific industry

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Chapter 8

Effective Channels withBusiness

Introduction

Plans for 2005/06


Innovation and Growth TeamsManufacturing Strategy ReviewWorld Class CommunicationsCross Cutting Sector Competitiveness IssuesBusiness Support Products

1 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf

sector to identify key issues that arelikely to shape its future has beenwarmly welcomed by industry and hasproven highly successful. A Materials IGTwas launched in the latter part of 2004with an Electronics IGT report publishedin December and one on Photonicsscheduled for September 2005.

8.5 Work to oversee the implementation ofall IGT recommendations is undertakenby a variety of industry-led strategygroups including the: Retail StrategyGroup; Retail Motor Strategy Group;National Aerospace Technology StrategyGroup; Bioscience Leadership Council;Construction – evolution; and theChemistry Leadership Council whichhas, for example, published sectorreports on future skills needs,technology and research priorities andfuture sustainability. We are in theprocess of establishing an ElectronicsLeadership Council, this being one ofthe main recommendations in theElectronics IGT report.

Manufacturing Strategy Review

8.6 In 2004 the Department reviewed theprogress of the Government’sManufacturing Strategy published inMay 2002. A report, ‘Competing in theGlobal Economy: The ManufacturingStrategy Two Years On’2, was publishedin July 2004 at a major TUCmanufacturing conference in London.

8.7 The review critically appraised actionunder the seven pillars of the strategyand produced an action plan on the nextsteps. This included the creation of aManufacturing Forum to draw togetherGovernment, regions, academics,unions and business. The Forum firstmet in December 2004, and willcontinue to meet for the next two yearsto drive forward action highlighted in theprogress report.

Manufacturing Advisory Service (MAS)3

8.8 One of the key successes of theManufacturing Strategy has been theestablishment of the MAS. MAS,delivered by the Department inpartnership with the English RDAs, andthe Welsh Assembly Government andWelsh Development Agency, continuedits rapid growth as a highly regardedsource of practical support formanufacturers. By providing hands onadvice and assistance from professionalexperts, MAS has proved to be asignificant, regionally delivered source ofmanufacturing knowledge and advicethat helps Britain’s mainly SMEmanufacturers to improve productivityand succeed by tapping into thecompetitive edge that investment inbest practice processes and newmanufacturing technologies can bring.

8.9 Since it began in April 2002 MASexperts have (to March 2005):

▼ Dealt with over 56,000 enquiries frommanufacturing companies;

▼ Carried out 11,000 free diagnostic visitsto manufacturing companies; and

▼ Followed up with over 3,000 in-depthassignments to address productivityissues.

8.10 As a result MAS has generated addedvalue of over £155 million for firms ithas assisted. The success of MASwas recognised in the 2004 SpendingReview, when the Governmentannounced enhanced funding for theservice over the period 2005-08.The Manufacturing Advisory Servicein Scotland is expected to start inOctober 2005.


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2 Full text at www.dti.gov.uk/manufacturing/strategy_review.pdf3 Further information available at www.mas.dti.gov.uk/home.jsp

Effective Channels with Business

103

PRIORITY ACTION 2004/05: Offer better targeted business support (reduced from over

100 schemes to nine) by introducing the remaining new products and closing previous

schemes.

DTI strives to target its resources where they will have most impact. Following a review in2002, consulting business, stakeholders and intermediaries, the DTI has transformed the wayit delivers support. We have replaced over 100 business support grants and schemes with asuite of strategically focused products. This allows the support we offer to be much clearer,more effective and more accessible than ever before. The new products have been designedto help businesses overcome barriers to success by offering practical support at the keystages of their development. We are targeting the support in four areas where evidenceshows that we can have the biggest impact on productivity: innovation, achieving bestpractice, raising finance and regional investment.

Business support products from DTI

Succeeding through innovation

▼ Knowledge Transfer Networks – a grant to an intermediary to set up a network bringingtogether businesses, universities and others with an interest in technology applications.

▼ Collaborative Research and Development – funding for collaborative R&D projectsbetween business, universities and other potential collaborators.

▼ Grant for Investigating an Innovative Idea – subisidised consultancy to helpbusinessess to implement their ideas.

▼ Grant for Research and Development – a grant to carry out R&D, delivered through theRDAs from April 2005

▼ Knowledge Transfer Partnerships – a grant to help businesses transfer and embedexpert knowledge from a university or other research base by working together on astrategic project.

Achieving best practice in your business

▼ Access to Best Business Practice access to best practice guides, case studies, factsheets and online tools. Over 300 guides, tools and case studies are available online tohelp businesses to follow best practice.

▼ Support to Implement Best Business Practice – a free diagnostic with subsidisedconsultancy to help businesses apply best practice to their business.

Raising finance

▼ Small Firms Loan Guarantee – a government loan guarantee encouraging commerciallenders to provide loans to businesses lacking security.

Regional investment

▼ Selective Finance for Investment in England – a grant towards capital costs forbusinesses located in or moving into Assisted Areas.

Information on all of the support products can be found at www.dti.gov.uk andwww.businesslink.gov. Products can be accessed through Business Link for small andmedium sized businesses and through DTI for larger corporates and business organisations.

Business Support Products

World Class Communications

Broadband

8.11 The availability of broadband has grownmuch faster than had been predictedand this can be attributed to a positiveresponse by the industry to the stronglead shown by the DTI, RDAs andDevolved Administrations. The DTI hasworked with Departments acrossGovernment to implement theBroadband Britain Action Plan, whichevolved through extensive consultationwith industry through BroadbandStakeholder Groups (BSG), and inparticular with Defra to promote thevalue of broadband for businesses,individuals and communities in ruralareas.

8.12 The UK broadband market hascontinued to grow rapidly during 2004.More than 96% of households haveaccess to at least one affordablebroadband service, prices are continuingto fall and there are now more than 6million subscribers (residential andbusiness). As a consequence the UKbroadband market is now the mostextensive and third most competitive inthe G7. Take-up of broadband increasedover six months from 13% to 20%.Demand for next generation networks isincreasing in response to businessinvestment in content, tools andservices. The DTI continues to workclosely with the BSG to identify relevantmetrics, dependencies and inform policydevelopment.

8.13 The continuing willingness of themarket to invest in new services,coupled with Ofcom’s review of thebroadband market and the future of thetelecommunications market moregenerally indicate that the broadbandmarket will continue to be an importantinfluence in the UK economy for sometime to come.

Digital Switchover

8.14 The UK leads the world in take-up ofdigital television, with nearly 60% ofhouseholds having access to digital TVat the end of December 2004, butcontinued progress relies on consumersmaking informed choices.

8.15 The Report of the Digital TelevisionProject was delivered to Ministers onschedule, setting out actions andownership of issues, putting forwardtarget dates, and preparing for asuccessor project to implement theswitchover to entirely digital terrestrialtelevision transmission. UK industrywere involved in all the task groups,wrote many of the reports and wererepresented at the Ministerially chairedSteering Board. The OGC commendedthe effectiveness of DTI’s closecollaboration with DCMS, and thecommitment of industry stakeholders ina unique partnership.

3G Mobile Services

8.16 Business and industry requireseffective communications tosuccessfully compete in the globalmarket. The Government remainscommitted to the UK having a world-class communications infrastructure. 3Goffers true mobile broadband, potentiallyallowing business to operate far moreeffectively on the move. The UK tookthe lead in Europe in enabling theoperators to offer 3G with the result theUK is in the vanguard of thedevelopment of 3G services and wehave worked closely with Ofcom tomaintain an environment for investmentin 3G network infrastructure, respondingto the concerns of business. 3G mobileservices achieved a significantmilestone at the end of 2004, with over2 million UK users, and three networkshaving launched consumer (voice)services. Four networks now offer 3G


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data card services and the uptake ofthese and other business-focusedservices (e.g. Blackberry) is strong.With a total of five mobile networks andtwo virtual network operators, the UKremains the most competitive mobilemarket in Europe.

Ofcom, radio spectrum and unsolicitedemails

8.17 We have worked closely with Ofcom(the new integrated regulator fortelecoms, broadcasting and spectrumcreated jointly by DTI and DCMS via theCommunications Act) during its first fullyear of operation to ensure smooth andeffective liaison between regulatoryactivity and wider policy-making anddelivery (domestic and international) andin particular that the views and concernsof business are fully taken into account.Liberalisation and secondary trading ofradio spectrum, successfully introducedin December 2004, is expected toincrease investment opportunities andenable continued innovation in productsand services. A timetable for release ofadditional frequency bands to supportfurther expansion of mobile andbroadband services was also published.It is, however, recognised that the use

of unsolicited e-mails “Spam” andinternet crime is on the rise. To counterthis the DTI has taken the lead infostering both commercial solutions andinternational co-operation.

Cross Cutting SectorCompetitiveness Issues

8.18 The Department continued to developits strategic long-term approach toinfluencing activity for the benefit of UKbusiness. For example, in the area ofregulation the industry/Whitehall“VIPER”4 group has given theautomotive sector more, and earlier,opportunities to influence regulatorypolicy. A similar model operates in theBioscience sector and has now beenextended to the chemical, e-commerce,retail and construction sectors. Work isalso underway to promote and developthis concept within the EU.

8.19 On DTI regional engagement a jointnational/regional action plan coveringsector and company relationshipmanagement was agreed with theRDAs and is being progressed.

Effective Channels with Business

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4 Vehicle Industry Policy and European Regulation5 This relates primarily to work pursued in partnership with industry to drive up sector productivity and performance e.g. recommendations made by IGTs.6 This covers work on improving access to broadband and the proposed switchover to Digital Television


Provision

Total 17.5 16.5 15.7 16.0 16.0

Of which:Building Effective Relations with Business5 11.1 13.3 10.1 10.4 10.4

Enabling Infrastructure6 6.4 3.2 3.0 3.0 3.0

Capturing and analysing data on Business Performance 0.0 0.0 2.6 2.6 2.6

Expenditure on Effective Channels with Business (£ million)Figure 8.1:

Introduction

Our challenge is to extendcompetitive markets by developingfree and fair markets across Europeand throughout the world, and byplacing empowered and protectedconsumers at the heart of an effectivecompetition regime.

9.1 We want open, dynamic markets – inwhich newcomers can constantlychallenge incumbent firms and givecustomers greater choice, better qualityand lower prices. They promoteinnovation and they attract newinvestment, reinforcing the virtuous circleof competition and innovation. We willpromote competition and open marketsin the EU just as we will promote freeand fair trade globally through the WorldTrade Organisation (WTO).

Plans for 2005/06

9.2 The DTI’s Business Plan 2005-081 setsout our plans to extend competitivemarkets at home and abroad includingdelivery of PSA targets 32 and 53.We will:

▼ Reduce the regulatory burden onbusiness arising from DTI regulations bymore than £1 billion over the period ofthe Five Year Programme through betterregulation and de-regulation, includingdelivering substantial reforms oncompany law, and throughimplementation of key EU directives andextending common commencementdates to new areas of domestic law;

▼ Open up markets in the UK andoverseas in a fair and efficient manner.Key milestones include a successfulHong Kong WTO Ministerial inDecember 2005, implementation of theEU’s new Generalised System ofPreferences and making progress onthe Services Directive;

▼ Promote higher levels ofcompetitiveness in Europe, followingagreement to the National Action Plansat the Spring Council in March 2005;and

▼ Ensure the UK framework forcompetition and consumerempowerment and support is at thelevel of the best by 2008, includingPeer Reviews of the UK competitionframework in 2006 and 2008 and

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Chapter 9

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Plans for 2005/06


Opening Markets in EuropeWorld MarketsConsumer Strategy



developing more satisfactorymeasurements for tracking progress onimproving the consumer framework.



Opening Markets in Europe

Prepare for the UK’s EU and G8Presidencies during the second halfof 2005 to ensure that we are able tomake maximum use of theseopportunities.

9.3 Ministers have agreed the Department’spolicy themes for the EU CouncilPresidency, consistent with overall UKpriorities and the Department hasscoped the Presidency programme ofpolicy deliverables, activities and keyevents. A Governance structure tooversee and direct the running of thePresidency has been put in place, witha Programme Board of internal seniormanagement and a high-level SteeringGroup of external stakeholders.Ministers have also agreed to holdinformal Competitiveness and EqualityCouncils during the Presidency.

Promote Prosperity for All in Europe –re-energise the Lisbon agenda on EUeconomic reform; promote a singlemarket in services; and expand anddevelop the role of theCompetitiveness Council.

9.4 The Department has played a leadingrole in driving forward work on EUeconomic reform in theCompetitiveness Council. Under theauspices of the High Level Group onCompetitiveness and Growth, weproduced an analysis of the Kok reporton the Lisbon Mid-Term Review, which

has been influential in shaping theCompetitiveness Council’s Key IssuesPaper for the 2005 Spring EuropeanCouncil.

9.5 EU regulatory reform is an essentialelement of the economic reformagenda. In spring 2004, the Departmentled a volunteer group of MemberStates, which created a model forcompetitiveness testing of proposedEU legislation that was subsequentlyendorsed by Coreper. The Departmentanticipates that the Commission’srevised guidelines on impactassessment, due in 2005, willreflect a number of the group’srecommendations and help to sharpenthe focus on business in EU policymaking.

9.6 During the latter part of 2004, theDepartment also worked closely withthe Cabinet Office to achieveagreement in the CompetitivenessCouncil on 15 priority pieces of EUlegislation for regulatory simplificationas the culmination of a joint Irish/DutchPresidencies exercise. The UK andLuxembourg Presidencies will beembarking on a follow-up exerciseduring 2005 with the Departmentplaying a key role.

9.7 In December 2004, the Secretary ofState for Trade & Industry, and theChancellor of the Exchequer co-signedthe Six Presidency Statement onAdvancing Regulatory Reform in Europealong with their counterparts fromIreland, the Netherlands, Luxembourg,Austria and Finland. This statement,which follows on from the FourPresidency initiative that was launchedin January 2004, outlines how the 2004-06 Presidency countries intend tochampion the better regulation agendain Europe over the coming months and

Extending Competitive Markets

107


highlights the areas where we wouldlike to see tangible progress. Theseinclude: strengthening competitivenesstesting and impact assessmentprocedures; reducing the administrativecosts of regulation; simplifying existinglegislation; and strengthening theregulatory framework through improvedconsultation and measuring regulatoryquality.

9.8 Detail on the progress towards a singlemarket in services can be found inparagraph 9.12 below.

Continue to lead EU debate onconsumer and competition policy(e.g. unfair trading, sales promotion),and negotiate for the opening up EUservices while maintainingappropriate levels of consumerprotection.

9.9 In 2004, the Department saw somesignificant successes in creating a moreeffective and robust EU consumerframework. In October, the Regulationon Consumer Protection Co-operationwas adopted, which is aimed atensuring that enforcement agenciesacross Europe are equipped to tacklecross-border scams. The UK has been astrong supporter of this initiative andwelcomed its adoption well ahead of itsoriginal negotiation schedule.

9.10 The UK has been at the forefront of thenegotiation of the Unfair CommercialPractices Directive, adopted in April2005, shaping it for the benefit of UKbusiness and consumers. The Directivewill plug the gaps in existing consumerlegislation and provide a clearer set ofrules for both business and consumers.

9.11 The Department made considerableprogress in 2004 in leading the debateon the EU’s competition policy, with two

major successes. First, the introductionof a new substantive test (a significantimpediment to effective competition) inline with UK objectives in a new ECMergers Regulation, which came intoforce on 1 May 2004. Second, wewarmly welcomed the EC’sCommunication on a proactivecompetition policy, which very usefullyset out the competition response to theLisbon and competitiveness agenda,in line with UK priorities for DGCompetition. We were particularlypleased to see the Commission’sintention to conduct sectoral inquiriesinto dysfunctional markets, which maynot be working well for consumers.

9.12 2004 saw the publication of the EUDirective on Services in the InternalMarket. The Department completed athree-month public consultation5 andheld two large awareness-raising eventsfor stakeholders. The Department hascontinued negotiations both in Brusselsand, bilaterally, with other MemberStates. The Department also publisheda public consultation on the draftregulations to implement the GeneralProduct Safety Directive on 21December 20046. This consultationclosed on 31 March 2005 and theDepartment anticipates that the newrevised General Product SafetyRegulations will come into force insummer 2005.

Work with the Office of Fair Trading(OFT)7 and Competition Commissionto promote competitive markets athome and abroad.

9.13 The Department has a general interest inthe OFT’s market studies andco-ordinates Government responseswhere those studies make regulatoryrecommendations. Consideration of


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5 Consultation and response document on the EU Directive on Services in the Internal Market can be found atwww.dti.gov.uk/consultation/consultation-1183.html

6 Consultation on Proposals to implement Directive 2001/95/EC on general product safety can be found at www.dti.gov.uk/ccp/consultations.htm

regulatory and policy issues is a matterfor the relevant Government Departmentresponsible. However, the Departmentworks closely with other GovernmentDepartments and the DevolvedAdministrations to make sure that theGovernment’s response to a marketstudy report takes account not only ofcompetition and consumer interests butwider public policy objectives.

9.14 In the past year, the OFT completed thefollowing market studies: DoorstepSelling; Public Sector Procurement;Public Subsidies (stage 1); Store Cards;and Estate Agents. The OFT alsolaunched the following market studies:Ticket Agents (17 June 2004); CareHomes (29 June 2004); ClassifiedDirectory Advertising Services (3November 2004); Financial Services andMarkets Act (4 November 2003);Liability Insurance follow-up review(3 December 2004); and PropertySearches (8 December 2004).

9.15 The Department has also implementedthe Competition Commission8

recommendations relating to the marketfor extended warranties on domesticelectrical goods, with new regulationscoming into force on 6 April 2005.In addition, a consultation documentcovering proposals to implement therecommendations on prescription-onlyveterinary medicines was published on22 February 20059. This is the final pieceof work under the old competitionregime governed by the Fair Trading Act1973. From now on, under the EnterpriseAct 2002, the Commission will have thepower to implement its own remedies.

9.16 Abroad, the Department has also beenworking with the OECD to promotecompetition issues across the EU andworldwide. The Department is also

working with OFT on new guidelines forthe application of Article 82 of the ECTreaty (abuse of a dominant position)and the case for encouraging privatelegal actions to enforce EC competitionlaw. In addition, the Department will beencouraging DG Competition to play astronger role in looking at thecompetitiveness aspects of otherCommission proposals against thebackground of the Lisbon economicreform agenda.

World Markets

Work with others to complete theDoha round and other tradenegotiations on terms acceptable toUK, including significant benefits todeveloping countries.

9.17 A Framework Agreement within theWTO General Council was achieved on31 July 2004 and this representedimportant progress on the Dohadevelopment agenda and a major step –consistent with the PSA target –towards an early completion to theRound. The UK was a vocal advocate ofthe Framework Agreement within boththe EU and the wider WTO Community.The EU initiative to offer to eliminateexport subsidies for agricultural productsif other developed countries did likewise,was strongly supported by the UK andwas crucial to unlocking negotiations inthe lead-up to the Agreement.

9.18 The Department is working to completethe renegotiation of the GeneralisedSystem of Preferences within the EU, ina manner consistent with the pro-development approach set out in ourWhite Paper on Trade & InvestmentPolicy10. It will also continue to ensurethat the development needs of theAfrican, Caribbean and Pacific countries


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7 Further details about the work of the OFT can be found at www.oft.gov.uk8 Further details about the work of the Competition Commission can be found at www.competition-commission.org.uk9 www.dti.gov.uk/ccp/topics2/vetmeds.htm10 www.dti.gov.uk/ewt/whitepaper.htm

are at the heart of the Commission’songoing negotiations of EconomicPartnership Agreements, in line with theposition paper published in March 2005.These agreements will come into forcein 2008.

Continue seeking to minimise tradedisputes, their consequences for UKbusiness, and the disruption theycause to the international tradingsystem.

9.19 The Department has continued to issueregular, comprehensive information aboutthe state of trade disputes to UKbusinesses, enabling them to plan theiractivities in the light of the fullest factsavailable. The Department has workedclosely with HM Customs & Excise toidentify technical solutions that wouldallow imports of a range of products fromthe US, especially gold and silver bullionand hickory tool handles, to avoid theadditional duties imposed by the EU as aresult of the Foreign Sales Corporationdispute. The Department subsequentlyargued successfully for those duties to besuspended retrospectively from 1 January2005, to the benefit of UK importers,traders and downstream industrial users,while the WTO considered theacceptability of new US legislation.If duties are ultimately reimposed, noproducts of particular sensitivity to UKbusiness will be affected.

9.20 Similarly, the Department also arguedsuccessfully for the exclusion ofsensitive products from the listpotentially subject to additional EUduties as a result of the ByrdAmendment dispute. In the second halfof the year, the Department was closelyinvolved in the EU’s deliberations on theAirbus/Boeing disputes, arguing forthese to be resolved throughnegotiation rather than WTO litigation.

The EU and US subsequently agreedterms for such negotiations, which willrun into 2005/06.

9.21 On trade defence (i.e. antidumping,antisubsidy and safeguard applications),the Department has continued toassess cases against the objective ofpromoting free and fair markets and hasconsulted closely with otherDepartments as well as with producerand consumer organisations to ensurethat national interests are fully takeninto account in positions taken by theUK on individual cases. The Departmentworked particularly closely with theScottish Executive, the Scottish salmon-farming industry and Irish counterpartsto pursue safeguard measures againstimports of farmed salmon. An ECinvestigation found that serious injurywas being caused to Scottish and Irishsalmon farmers by increased, low-costimports from Norway, and definitivesafeguard measures were introduced inFebruary 2005.

Publish a White Paper on Trade andInvestment Policy (summer 2004) toset out how the UK can best respondto the opportunities and challenges ofglobalisation, and how globalisationcan work for people worldwide.

9.22 On 6 July 2004, the Departmentpublished the Trade and InvestmentWhite Paper, ‘Making Globalisation aForce for Good’. The White Paper bringstogether strands of trade policy,competitiveness (both at UK and EUlevels), development, and trade andinvestment promotion. It makes thecase for free but fair trade butunderlines that, for developingcountries, trade liberalisation should begradual, sequenced and integrated intowider development and povertyreduction strategies. The Paper alsocalls on developed countries to moveaway from the ‘mercantilist’ approach to


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trade negotiations and makes a strongcase for Common Agricultural Policyreform. At a time when the UK mayhave particular influence, through itspresidencies of the G8 and of the EU,the White Paper sets out a positivemessage for globalisation.

Through the Better RegulationProgramme, streamline regulations,improve stakeholder engagement,and promote greater engagement ofsmall firms on regulation issues:

9.23 The Small Business Service (SBS)11

made excellent progress on commoncommencement dates (CCDs). InDecember 2004, following aconsultation between April andSeptember 2004 that showed businessstrongly favoured the extension ofCCDs, the Chancellor of the Exchequerannounced that, starting in 2005, CCDswould be progressively extended to alldomestic legislation that impact onbusiness. In addition, the SBS’s SmallFirms Consultation database has beenset up to improve stakeholderengagement between policy makersand SMEs. The database consists ofvolunteer companies that wish to workwith Whitehall so policy makers can usethe database to test out new policyproposals to ensure that burdens onsmall firms are kept to a minimum.The database continues to grow inimportance, with over 30 consultationsof the volunteer panel in the ninemonths to end-December 2004. (Fulldetails of the Department’s performanceon Better Regulation can be found atAnnex C2.)

Consumer Strategy

Publish and implement a newConsumer Strategy.

9.24 The Consumer Strategy was publishedfor consultation in summer 200412.The final strategy is due to be finalisedin 2005. It sets out the rationale for aworld-class consumer policy andincludes a range of proposals toempower consumers and businessesthrough better information, clearerlegislation and improved redress andenforcement.

Reform the Consumer Credit laws,as set out in the Consumer CreditMarket White Paper (publishedDecember 2003).

9.25 The Consumer Credit Bill13 wasintroduced on 16 December 2004 butlapsed when the General Election wascalled and reintroduced on 18 May2005. The Department is also consultingon the Commission’s proposals for arevised Consumer Credit Directive andis expecting a re-draft of the Directive tobe issued by the Commission insummer 2005.

9.26 The Department laid StatutoryInstruments14 to update the advertisingregulations, require clearer pre-contractinformation and credit agreements, toenable credit agreements to beconcluded electronically and giveconsumers a fairer deal when theysettle a debt early. These were all inforce by 31 May 2005.


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11 Further details about the work of the SBS can be found at www.sbs.gov.uk12 Consultation on ‘Extending Competitive Markets: Empowered Consumer, Successful Business’ can be found at

www.dti.gsi.gov.uk/ccp/consultations.htm13 Full text at www.publications.parliament.uk/pa/cm200405/cmbills/016/2005016.htm14 www.dti.gov.uk/ccp/topics1/consumer_finance.htm#review: Statutory Instruments: 2004 no. 3237 CONSUMER CREDIT The Consumer Credit

(Enforcement, Default and Termination Notices) (Amendment) Regulations 2004; 2004 no. 3236 CONSUMER CREDIT The Consumer Credit Act 1974(Electronic Communications) Order 2004; 2004 no. 1482 CONSUMER CREDIT The Consumer Credit (Agreements) (Amendment) Regulations 2004;2004 no. 1481 CONSUMER CREDIT The Consumer Credit (Disclosure of Information) Regulations 2004; 2004 no. 1483 CONSUMER CREDIT TheConsumer Credit (Early Settlement) Regulations 2004; 2004 no. 1484 CONSUMER CREDIT The Consumer Credit (Advertisements) Regulations 2004

9.27 ‘Tackling Over-indebtedness – ActionPlan 2004’15, set out the Government’sapproach to minimise the number ofconsumers who become over-indebtedand improve the support and processfor those who have fallen into debt.Credit is an integral part of our dailylives and, for the majority of consumers,manageable borrowing provides animmense benefit. However, a significantminority struggle and suffer due to over-indebtedness. The Action Plan set outthe nature of the current situation and,for the first time, drew together theresponses from across Government andamong strategic partners, such as thecredit industry and advice providers.Priority actions included thedevelopment of a national strategy forfinancial capability, increasing theavailability of affordable credit, newconsumer credit legislation, and a step-change in the availability of free debtadvice and improvements in insolvencyand court provisions.

Deliver Consumer Direct by 2007.

9.28 In 2004, the first Consumer Direct16

contact centres were launched. Theservice went live in Scotland in July,followed by Yorkshire & the Humber inAugust, and then Wales and the SouthWest in September. By the end of 2004,the service had dealt with approximately180,000 calls from consumers.

9.29 The Department commissioned anindependent research company (IPSOS)to conduct a customer satisfactionsurvey to evaluate the service. IPSOSquestioned over 1,200 consumers whohad called Consumer Direct. The initialresults were fed back to theDepartment in December 2004 andthese were very positive, with 84% ofthose questioned saying they weresatisfied or very satisfied with theservice provided. 89% said that theywould recommend the service tofriends or family. The survey alsohighlighted that Consumer Direct wasaddressing the previously unmetdemand for consumer advice, as 75%said that their experience withConsumer Direct was the first time theyhad accessed such advice from anyorganisation.

9.30 The Department also signed contractswith four regions for the next stage ofthe roll out of Consumer Direct. Theservice will be launched in the SouthEast, London, East of England and EastMidlands in the summer of 2005.


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15 ‘Tackling Over-indebtedness – Action Plan 2004’ can be found at www.dti.gov.uk/ccp/topics1/overindebtedness.htm16 Further information about Consumer Direct can be found at www.consumerdirect.gov.uk


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Provision

Total 78.718 77.9 92.5 88.8 88.9

Of which:Citizens Advice 22.9 23.9 23.7 21.0 21.0

Citizens Advice (Scotland) 3.1 3.2 3.2 3.2 3.2

Competition Commission 26.2 22.1 23.0 20.7 20.7

Competition Service 2.9 3.9 3.9 3.5 3.5

Consumer Direct 3.2 12.6 16.0 19.0 19.0

National Consumer Council 4.0 3.8 4.0 3.6 3.6

Royal Society for the Prevention of Accidents 0.2 0.5 0.4 0.4 0.4

Membership of WTO 2.7 4.2 4.0 4.5 4.8

SITPRO 1.3 1.3 1.1 0.9 0.8

Expenditure on Extending Competitive Markets (£ million)17Figure 9.1:

17 All figures rounded to the nearest £100K18 Capital Modernisation Fund for Citizens Advice Bureau (Capital Grant) – £10 million paid in 2003/04 not included in above total

Introduction

Our challenge is to maximisepotential in the workplace bymaintaining an adaptable labourmarket while delivering a reduction oflegal complexity for business bothhere and in Europe, raising the levelof and demand for skills, and outsidethe workplace by promoting genderequality and diversity.

10.1 Innovation needs change in theworkplace as well as in products,services and process. Skills levels,organisational structures and managerialability are important determinants ofproductivity and business performance.The successful introduction of newtechnologies depends on theintroduction of new work practices.Business transformation will not workunless the workforce are involved andare given chances to influence anddevelop new and better skills.

10.2 In the future, the UK will have tocompete more and more on the basis ofunique and innovative products andservices. This will require inspirational

leadership, stronger management skills,a highly trained and motivatedworkforce, a flexible labour market thatpromotes diversity and fair treatment,and workplaces that recogniseenvironmental issues and the need forgreater resource productivity.

Plans for 2005/06

10.3 The DTI’s Business Plan 2005-081 setsout our plans to maximise potential inthe workplace and deliver PSA targets 92

and 103. We will:

▼ Maintain and improve the overall levelof UK labour market adaptability, inparticular by ensuring that when weregulate we enable more people to workor remain in the workplace, including byoutlawing age discrimination at work andin vocational training; introduce newmeasures to support working families tohelp improve work-life balance; and helpensure that employers and individualshave the skills they need to be successful;

▼ Establish the Commission on Equalityand Human Rights to improve equalityof opportunity in the workplace and

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Plans for 2005/06


SkillsDiversityLegislative FrameworkEmployment Relations



within wider society, and provideimproved and integrated support forequality, diversity and human rights by2007/08; work through the Women andWork Commission to improve the labourmarket position of women and achievemeasurable improvements in genderequality including a further reduction inthe gender pay gap;

▼ Begin a review of discrimination law inGreat Britain to consider the potentialfor making this simpler and fairer forindividuals and organisations alike;

▼ Launch the Union Modernisation fund toassist trades unions to modernise theiroperations and use it to encourageunions to engage in the newInformation and Consultationrequirements; and

▼ Make it easier for workers andemployers to understand their rightsand comply with their responsibilities,including setting up the employee.directwebsite (by 2006) and targetenforcement activity more effectively onemployers who deliberately exploit theirworkers.



Skills

Drive forward implementation of theSkills Strategy (published July 2003) toinclude creation of a network of SectorSkills Councils and Regional SkillsPartnerships that help to create andarticulate employer demand for skills.

10.4 The Department continues to workclosely and effectively with the DfESand other partners in the Skills Allianceto implement the Skills Strategy, whichhas been built on by the publication ofthe recent White Paper ‘Skills: gettingon in business, getting on at work’.5

As joint sponsors of the Skills forBusiness Network,6 also with DfES,the Department has also beenthoroughly involved in the continuingdevelopment of the individual SectorSkills Councils (SSCs)7.

10.5 The Department continues to workclosely with the RDAs to support thedevelopment of Regional SkillsPartnerships (RSPs) in each Englishregion. Good progress was made toestablish a RSP in each English regionwith the network now largely complete.

Use the new business supportproducts to promote the value of highperformance workplaces and skills.

10.6 DTI is offering practical help inemployment “best practice” toorganisations and business wishing tofind out how to improve theirperformance through better ways ofworking. The DTI has launched abusiness support product to implementbest practice aimed at smallerbusinesses; this is delivered throughBusiness Link8. There is also relevantstrategic guidance covering a number ofareas including work life balance, flexible


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4 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf5 www.dfes.gov.uk/publications/skillsgettingon/6 For further information go to www.sbs.gov.uk/default.php?page=/services/skills-bus-network.php7 For further information go to www.ssda.org.uk/ssda/default.aspx?page=28 Business Support products are covered in more detail in Chapter 8 ‘Effective Channels with Business’

working and how to achieve a highperformance workplace, available throughwww.dti.gov.uk/bestpractice. Theseinclude the Work Life Balance businesscase, Flexible working in practice, Mobileworking, and a suite of documentscovering key elements that contributeto high performance in the workplace.

Diversity

Finalise regulations preventing agediscrimination so that we can workwith partners to help employers andemployees prepare for their cominginto force in 2006.

10.7 On 14 December 2004 the Secretary ofState for Trade and Industry and theSecretary of State for Work andPensions announced how agediscrimination legislation will tackleemployers’ mandatory retirement ages.The Government has decided to:

▼ set a default retirement age of 65, butalso create a right for employees torequest working beyond a compulsoryretirement age, which employers willhave a duty to consider (modelled onthe right to request flexible working);

▼ allow employers to objectively justifyearlier retirement ages if they can showit is appropriate and necessary; and

▼ monitor the provisions and formallyreview them after five years.

10.8 In summer 2005, the Department willconsult on draft legislation covering thisand remaining areas highlighted in theAge Matters consultation that ended inOctober 2003 – for example,recruitment, selection, and promotion.The Directive has to be implementedby 2 December 2006, but legislation isscheduled to come into force on1 October 2006, in line with theDepartment’s two-dates policy.

Support the successful passage of theCivil Partnership Bill.

10.9 The Civil Partnership Act9 was passedby Parliament in November 2004 andwhen implemented, will, for the firsttime, give same-sex partners theopportunity to obtain legal recognitionfor their relationship. The Act should beimplemented about a year after RoyalAssent in December 2005.

Work towards the creation of a singleequality body that will have the job ofcreating a strong partnership withbusiness to tackle discrimination.

10.10 A White Paper was published in May2004 setting out proposals for theCommission for Equality and HumanRights (CEHR)10 which will provide amodern, coherent institutionalframework for supporting equalitylegislation and provide institutionalsupport for human rights for the firsttime. A Bill to establish the CEHR wasincluded in the 2004/05 Parliamentaryprogramme, with a view to startingoperation in 2007.

Legislative Framework

Influence proposals in Europe so thatthey better reflect market conditionsin the UK (e.g. working time, agencywork, data protection and skills).

10.11 The EC continued their review of theWorking Time Directive, and publishedlegislative proposals on 22 September2004. DTI had in the meantimeconsulted stakeholders, both in a formalconsultation document and throughinformal discussions, on the impact ofpossible changes to the Directive, andused the responses to inform ournegotiating position.


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9 Full text at www.hmso.gov.uk/acts/acts2004/20040033.htm10 Full text at www.dti.gov.uk/access/equalitywhitepaper.pdf

10.12 The EC proposed the draft AgencyWorkers Directive in March 2002.Its stated aims are to improve thequality of temporary agency work byapplying an equal treatment principleand to establish a suitable frameworkfor the use of temporary agency workto contribute to creating jobs and thesmooth functioning of the labourmarket. The UK position is that wesupport the underlying principles of theDirective but that the text needs to bechanged to reflect the differing labourmarkets across the EU. The UK is keento work constructively to find a solutionand has tried to find a middle groundbut views remain very polarised.

Provide effective enforcementmechanisms for the NationalMinimum Wage, Working Time andEmployment Agency Standards.

National Minimum Wage

10.13 On 1 October 2004 the main adult ratefor workers aged 22 and over wasraised to £4.85 an hour and thedevelopment rate, for workers aged18-21 inclusive was raised to £4.10.A new rate for 16 and 17 year oldsabove compulsory school leaving agewas also introduced at £3.00 per hour.The new rate strikes the balancebetween preventing exploitation ofyounger workers while maintaining theincentives for 16-17 year olds to stay onin full-time education or training.

10.14 The National Minimum Wage Act 1998has now been in force for six years.The Inland Revenue has operational

responsibility for enforcing the minimumwage and has operated a helpline andnetwork of compliance teams since1 April 1999 to fulfil that role.

Working Time Regulations

10.15 The Department has continued to workwith the public bodies responsible forenforcing the Working Time Regulations(responsibility is split between theHealth and Safety Executive, the CivilAviation Authority, Vehicle and OperatorService Agency, Local Authorities andEmployment Tribunals). While day-to-dayenforcement is a matter for thesebodies, the Department maintains aclose interest in all relevantdevelopments and plays its part inensuring that the enforcement regime isfair, appropriate and retains theconfidence of all.

Employment Agency Standards (EAS)

10.16 The Employment Agencies Act 1973and its associated regulations governthe activities of the private recruitmentindustry in Great Britain. The EASInspectorate enforces that legislationand its inspectors follow up everyrelevant complaint received concerningpossible breaches of the legislation.Inspectors also undertake targetedinvestigations. EAS inspectorsundertake their investigations by visitingthe agency’s/employment business’spremises to examine relevant records.There is also an EAS Helpline (0845 9555105), which provides advice on thelegislation and the work of the EASInspectorate.


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Telephone enquiries 47,277

Complaints (received) 1,605

Investigations completed 4,132

Arrears identified £3.02 million

National Minimum Wage Enforcement Activity (April to January 2005)Figure 10.1:

10.17 The Inspectorate has the power to takeprosecution proceedings in aMagistrates’ Court, which, if successful,can lead to a fine of up to £5,000 foreach offence. If the DTI believes that anindividual’s behaviour indicates thathe/she is unsuitable to operate as anagency/employment business, theInspectorate will make an application toan Employment Tribunal for a ProhibitionOrder against that individual, which canresult in that person being prohibitedfrom running an agency or employmentbusiness for a maximum period of 10years.

Implement and publicise theInformation and Consultation Directiveand update the legislative frameworkfor employee involvement at work(Employment Relations Bill). Promotepartnership and union modernisation.Consider the impact of migrantworkers on skills and other needs.

Information and Consultation Directive

10.18 The Information and Consultation ofEmployees Regulations 200411, givingemployees the right to be consulted andinformed about matters that effect themat work, were made on 21 December2004. Guidance on the Regulations waspublished in January 200512. A series ofregional master classes to help businessand unions, make best use of the newlaws was held during November andDecember 2004. An awareness-raisingcampaign aimed at employers andemployees was undertaken in theweeks leading up to the legislationcoming into force on 6 April 2005.

Employment Relations Act/ Unionmodernisation

10.19 The Employment Relations Bill receivedRoyal Assent in September 2004 andbecame the Employment Relations Act200413. The 2004 Act implemented thefindings of the Department’s review ofthe Employment Relations Act 1999,which among other things recommendedsome changes to the law on trade unionrecognition and to the statutory rights tobelong to a trade union. The 2004 Actalso established a legal base for settingup the Union Modernisation Fund;contained provisions to help enforce theminimum wage; and established a powerto implement EU requirements oninformation and consultation in theworkplace.

Partnership

10.20 The Partnership at Work Fund was agrant scheme designed to encourage abetter employer – employeerelationship. The Fund supportedworkplace projects within individualorganisations and larger strategicinitiatives to address sectoral andregional issues.

10.21 While DTI funding under the schemeended in March 2004 several projectsare expected to continue for a furthertwo years. DTI commitments to theseinitiatives amount to £12.5 millioncovering approximately 250 singleworkplace projects over five annualbidding rounds and 25 strategicprojects. The latter include bullying atwork, call centre absenteeism and equalpay. DTI continues to fund the largerstrategic initiatives committing up to amaximum of 50% of the project cost toaddress a range of issues.


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11 Full text available at www.legislation.hmso.gov.uk/si/si2004/20043426.htm12 Full text available at www.dti.gov.uk/er/consultation/i_c_regs_guidance.pdf13 Full text available at www.legislation.hmso.gov.uk/acts/acts2004/20040024.htm

Migrant workers

10.22 DTI worked closely with otherGovernment Departments to create astrong framework for managedmigration which addresses skill and/orlabour shortages, while continuing tofully utilise our domestic labour force, aswell as effective enforcement to crackdown on employers who seek to avoidtheir responsibilities in relation tomigrant workers

Look at alternatives to regulation andassess rigorously the costs andbenefits of employment regulation.Change domestic employment lawonly on two dates in the year andpublish internet guidance on what anew law says and means 12 weeksbefore it comes into effect. Acas andother partners will produce practical“how to” guidance.

10.23 The Department published its firstannual statement of forthcomingemployment regulations in January200414 which set out those regulationscommencing on each of the two dates,and signposted to further information onthe DTI website.

10.24 DTI has formed ‘partnerships’ withproviders who already produce adviceand guidance on employment issues.Acas are our main partner and producea series of leaflets summarisingindividual employment rights withsignposting to other sources ofinformation. This should improve accessto the practical information most peoplewant rather than providing in depth legalinformation for every issue.

Lead work across Government on thescope for extending the concept ofcommon commencement to otherareas of legislation.

10.25 Common Commencement Dates werepiloted by DTI in the EmploymentRelations area but their application isnow extended to all governmentlegislation including consumer andcompany law. They are covered in moredetail at paragraph 9.23 of Chapter 9,Extending Competitive Markets and inAnnex C2, Better Regulation.

Employment Relations

Improve the way that employees andemployers work together to tackledisputes in the workplace, workingwith Employment Tribunals Serviceand Acas.

10.26 The Employment Act 2002 (DisputeResolution) Regulations 2004 S.I.No. 75215 have been introduced toimplement the dispute resolutionprovisions of the Employment Act200216. These came into effect on1 October 2004. New employmenttribunal regulations and rules ofprocedure, new Employment AppealTribunal regulations and a new AcasCode of Practice on disciplinary andgrievance procedures all came intoeffect on the same date, forming acoherent package of measures topromote the resolution of employmentdisputes, where possible withoutrecourse to legal action. Publicconsultation has taken place on each ofthese measures, and an extensiveguidance campaign took place topromote understanding of the changes.


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14 Statement available at www.dti.gov.uk/er/regslist_2004.htm15 www.legislation.hmso.gov.uk/si/si2004/20040752.htm16 www.legislation.hmso.gov.uk/acts/acts2002/20020022.htm

Acas17

10.27 Acas is an independent statutory body,funded by the Department. Its aim is toimprove organisations and working lifethrough better employment relationsand its services include providinginformation, advice, training on a widerange of employment issues and withAcas Advisers working closely withemployers, employees and theirrepresentatives to resolve problemsand make workplaces more effective.The Acas national helpline deals withapproximately 850,000 calls per yearwhile there are more than a millionunique visitors to the Acas website,which provides on-line publications,e-learning packages and Q&As onemployment matters.

10.28 During 2004/05 Acas has:

▼ Delivered over 2,000 training sessionson employment issues;

▼ Processed approximately 90,000 actualand potential employment tribunalclaims;

▼ Developed its working relationship withthe Employment Tribunal Service (ETS)and responded effectively to the changein procedures outlined in theEmployment Act 2002; and

▼ Worked closely with other public andprivate sector partners, e.g. the Healthand Safety Executive in launching thegovernment’s new standards formanaging work-related stress and withthe Office for Public Sector Reform inrespect of Alternative DisputeResolution (ADR).

Employment Tribunals Service (ETS)18

10.29 The ETS’s performance for 2004/05 isdetailed in Chapter 16 ‘ExecutiveAgencies’.


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17 Full details of Acas and it’s activities can be found at www.acas.org.uk18 Full details of the ETS and its activities are available at www.ets.gov.uk19 All figures rounded to the nearest £100K.


Provision

Total 119.5 124.7 128.1 116.4 110.4

Of which:Employment Tribunal Service 40.0 43.6 45.4 41 36.6

Employment Relations programmes 19.5 13.8 14.2 16.2 12.1

ACAS 46.9 46.8 49 44.2 39.4

Equal Opportunities Commission 7.4 8.7 8.2 8.0 0.2

Women’s National Commission 0.4 0.4 0.3 0.3 0.3

Equality and Gender 0.7 0.8 0.4 3.8 9.7

Skills programmes 4.6 10.6 7.7 0 0

Expenditure on Maximising Potential in the Workplace (£ million)19Figure 10.2:

Introduction

Our challenge is to promote anddeliver an effective framework forcorporate and insolvency activity,giving confidence to investors,business and other stakeholders.

11.1 An effective corporate and insolvencyframework is essential in order tosupport business and enterprise and togive confidence to investors, creditorsand others with a stake in howbusinesses are run.

11.2 The DTI, including Companies House(CH) and The Insolvency Service, hasa key part to play in ensuring that theUK’s overall framework for businessactivity supports productivity, enterpriseand the creation of long-termshareholder value. This frameworkneeds to strike a balance betweenencouraging enterprise and protectinginvestors and other stakeholders; andbetween minimising regulatory burdensand ensuring there are adequatesystems for ensuring transparency,compliance and enforcement.

Plans for 2005/06

11.3 The DTI’s Business Plan 2005-081 setsout our plans to enhance the corporateand insolvency activity framework.We will:

▼ Implement a reformed company lawframework through the Company LawReform Bill so as to minimisecomplexity to business and other usersand enable enterprise;

▼ Promote more efficient and effectivecapital markets by increasing confidencethrough greater transparency andstronger participation in the frameworkfor corporate and insolvency activity;and

▼ Improve the efficiency andeffectiveness of company registration,compliance, investigation and insolvencyincluding through new IT systems, toprotect investors, business and otherstakeholders, for example, byimplementing I-Solv, an electronicbankruptcy filing and associatedpaperwork processing system.

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Introduction

Plans for 2005/06


Corporate LawCorporate GovernanceCorporate MalpracticeCompanies HouseOther Key Legislative Developments




Corporate Law

Ensure new legislative powerscontained in the Companies (Audit,Investigations and CommunityEnterprise) Bill are successfullyenacted and implemented, and thenew Financial Reporting Council(FRC) structure is fully operationaland effective.

11.4 The Companies (Audit, Investigations andCommunity Enterprise) Bill receivedRoyal Assent on 28 October 20043.The Act improves protection againstEnron-style corporate scandals, bystrengthening the powers ofInvestigators to uncover misconduct;it strengthens the independent regulationof the audit profession and theenforcement of the company accountingrequirements. It also relaxes theprohibition on companies indemnifyingdirectors against liability, permitscompanies to pay directors’ defencecosts as they are incurred and creates anew type of company specificallydesigned for social enterprises.A commencement order was signed on9 December 20044. Some enablingprovisions came into force from1 January 2005; most of the provisionson audit, accounts, directors’ liabilitiesand investigations came into force on6 April 2005; the main provisions onCommunity Interest Companies are dueto come into force on 1 July 2005; andthe remaining provisions on non-auditservices will do so on 1 October 2005.

11.5 The new FRC was formally launched on29 March 2004 with five subsidiaryBoards. It took over the functions of theAccountancy Foundation to create aunified regulator with three main areasof responsibility: setting, monitoring andenforcing audit and accountingstandards; overseeing the regulatoryactivities of the professionalaccountancy bodies and regulatingaudit; and promoting high standards ofcorporate governance through oversightof the Combined Code. The regulatoryactivities of the FRC are supported byprovisions contained in Part 1 of theCompanies (Audit, Investigations andCommunity Enterprise) Act 2004.In December 2004 the FRC publishedits Regulatory Strategy and BusinessPlan5 and Budget for 2005/06.

Consult on detailed draft legislativeproposals implementing theindependent Company Law Review(CLR).

11.6 The Department has been working, indiscussion with business and legalstakeholders, on a new Company LawReform Bill to implement the work of theindependent CLR. Details of theGovernment’s proposals were publishedin the Company Law Reform WhitePaper6 in March 2005. As well as a widerange of specific proposals for changes tothe law this included details of newlegislative powers to reform and torestate Company Law in future by aspecial form of secondary legislation.These powers had been the subject of aspecific earlier consultation “CompanyLaw Flexibility and Accessibility”7 whichhad been generally welcomed.


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2 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf3 The text of the Act is available at: www.legislation.hmso.gov.uk/acts/acts2004/20040027.htm4 The text is available at www.legislation.hmso.gov.uk/si/si2004/20043322.htm5 The FRC’s Regulatory Strategy and Business Plan can be found at www.frc.org.uk6 Full text available at www.dti.gov.uk/cld/WhitePaper.htm7 Company Law Flexibility and Accessibility May 2004, available at www.dti.gov.uk/cld/pdfs/powerscondoc_final.pdf

Introduce the Bankruptcy RestrictionsOrders (BRO) Process containedwithin the Enterprise Act 2002.

11.7 The BRO Process contained in theEnterprise Act 2002 came into force on1 April 2004. From this date OfficialReceivers now consider whether theconduct of a bankrupt has beendishonest, reckless or culpable in someway and whether a BRO should besought against them. BROs can beobtained against bankrupts for a periodof between 2 and 15 years, dependingon the individual circumstances, andhave the effect of imposing therestrictions of bankruptcy for thatperiod.

Corporate Governance

Ensure a smooth transition toInternational Accounting Standards(IAS).

11.8 With effect from 1 January 2005, allcompanies whose securities are tradedon a regulated market in the EU arerequired by the European Regulation onIAS to prepare their consolidatedaccounts in accordance with IAS.In addition, the Government hasextended the use of IAS, on a voluntarybasis, to the individual accounts of suchcompanies and the individual andconsolidated accounts of all othercompanies, for financial years beginningon or after 1 January 2005. Regulationscame into force on 12 November 2004to implement this choice8. Theseregulations also implement theModernisation Directive and the FairValue Directive. These directives aredesigned to allow accounts thatcontinue to be prepared under domesticlaw to be more comparable with IASaccounts.

Develop and promote effective meansof enhancing shareholder activismand engagement and worked withstakeholders to identify and findsolutions to emerging issues onCorporate Governance.

11.9 In January 2005 the Department maderegulations requiring the directors ofquoted companies to prepare anOperating and Financial Review (OFR)for financial years beginning on or after1 April 2005. The OFR, a keyrecommendation arising from the CLR,is a narrative report setting out thecompany’s business objectives, itsstrategy for achieving them and therisks and uncertainties that might affecttheir achievement. The OFR will helpinvestors make better-informeddecisions and encourage an opendialogue between shareholders andbusiness to stimulate long term wealthcreation.

11.10 December 2004 saw the publication ofthe Building Better Boards publication9 –a best practice guide, produced inconjunction with businesses, whichoffers recommendations and tools tohelp companies improve recruitmentand performance in the boardroom, andso deliver improved long term value toshareholders. The publication highlightsrelevant provisions of the CombinedCode which have put a new emphasison the professionalism andeffectiveness of boards and individualdirectors’. The Department has alsoestablished a high-level corporategovernance forum, on which the FRCare represented, to enhance andco-ordinate discussion withstakeholders.

Corporate and Insolvency Activity Framework

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8 The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (SI 2004/2947).9 Available at www.dti.gov.uk/cld/DTI_BETTERBOARDS.pdf

11.11 Finally, following the announcement inFebruary 2004 of the Department’sresponse to the Rewards for Failureconsultation about directors’ contractsand severance payments10, theDepartment commissioned Deloitte tomonitor the application andeffectiveness of the Directors’Remuneration Report Regulations.Their report was published in January200511. In commenting on the report theSecretary of State noted that theregulations have had a positive impacton disclosure and companyremuneration policies and practices andthat it underlines the effectiveness ofthe Governments action in makingdirectors remuneration subject to closerscrutiny by shareholders.

Corporate Malpractice

Increase the effectiveness of companyinvestigations by raising the profileand understanding of the work ofCompanies Investigations Branch (CIB).

11.12 The Companies (Audit, Investigation andCommunity Enterprise) Act 2004,introduced from April 2005 (seeparagraph 11.4 above), containsprovisions to enhance the currentinvestigation powers. The introductionof the new powers is to be the subjectof articles in a range of business andtrade publications and the pages relatingto CIB on the Department’s websitehave been redesigned in order to makeit easier for the public to gain access toinformation about the role of CIB and torefer any complaints they wish to make.These strengthened powers, togetherwith efforts to raise the profile and thuscreate a better understanding of theinvestigation powers, will contribute tothe continued work of the Departmentin handling these investigations in atimely and effective manner.

Take out enforcement action in thepublic interest at the earliest possiblestage.

Companies Investigation Branch

11.13 The Secretary of State has powers toinvestigate corporate malpractice wherefraud or misconduct is suspected, whereshareholders have been deniedreasonable information, or where sheconsiders it to be in the public interest.As a result of such investigations, whichare usually confidential, companies maybe wound up, their directors may bedisqualified or prosecuted and theinformation generated may be passed toother regulators. These investigationpowers contribute to the Department’senforcement regime to maintain aneffective framework for corporate activityand dealing with unacceptable corporatebehaviour. In the year from April 2003 toMarch 2004, some 58% of requests forcompany investigations came from thegeneral public (Figure 11.1).

11.14 In 2003/04, the Department completed197 investigations (nearly all undersection 447 of the Companies Act1985). Against a departmental target ofcompleting an investigation on averagewithin 90 days of a decision toinvestigate, the average achieved bystaff was 92 days. There were 12disqualifications plus 2 convictions as aresult of earlier investigations, and 371companies were wound up by order ofthe Court on petitions presented by theSecretary of State. The number ofcompanies wound up was a muchhigher figure than usual as a result oftwo significant investigations intogroups and connected companies.

11.15 In cases of strong public interest theDepartment is also able to appointinspectors (under section 432 of theCompanies Act 1985) to investigate the


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10 Available at www.publications.parliament.uk/pa/cm200304/cmhansrd/vo040225/wmstext/40225m03.htm#40225m03.html_sbhd011 Full text available at www.dti.gov.uk/cld/Deloitte-Rep-DRRR-2004.pdf

affairs of a company and report publiclyon their findings. There were no newCompanies Act inspections during theyear.

Legal Services D

11.16 Legal Services D works with CIB andThe Insolvency Service to investigateand prosecute appropriate criminaloffences which they uncover. In2003/04, 273 people were convicted ofoffences and 50 of those receivedcustodial sentences. From April toDecember 2004, 203 people wereconvicted and 39 of those received acustodial sentence.

11.17 A key element in the Government’sstrategy to combat serious crime is theuse of confiscation orders to deprivefraudsters of their ill-gotten gains. Thishelps to protect the integrity of themarket place by sending out a clearmessage that dishonesty in commercialactivity will not be tolerated. Since theDTI has been pursuing confiscationorders it has obtained 14 confiscationorders totalling £1,168,825. Of this,£124,089 was ordered to be paid ascompensation to victims of the frauds.

Companies House

Deliver and promote e-filing servicesand implemented Companies Housepricing review.

11.18 CH has developed both its capability andtake-up of electronic filing servicesthrough its e Services Deliveryprogramme. Take-up of electronic annualreturns in 2004 climbed from 1% to 6%and over 70% of company incorporationsand 95% of company searches are nowcompleted electronically. Developmentwork in 2004 raised the CH online filingcapability to cover over 67% of thedocuments filed and this will increaseto over 80% in 2005. A key thrust ofthis work will allow companies to filesmall-unaudited accounts online fromspring 2005.

11.19 CH completed a comprehensive reviewof its prices early in 2004. The primaryoutcome of the review was a newframework for costing and pricing whichformed the basis for new feesregulations which came into force on1 February 2005. The efficiencies gainedfrom greater use of electronic filing arereflected in lower prices being set forthese services against those for thestandard paper filing of documents.


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Other Sources

Public

Divisions/agencies of DTI

DPP and Police

Other Government Departments

FSA and Self Regulating Organisations

Sources of Complaints Leading to Company Investigations in 2003/04Figure 11.1:

The review also recommended that CHshould research, consult and develop astrategy for the delivery of freeinformation, and this will form part ofCH programme of work in 2005/06.

Other Key LegislativeDevelopments

EU Action Plan on Company Law andCorporate Governance

11.20 EU action in 2004 was based onproposals contained in the Action Planpublished in May 2003. In line with theAction Plan, two non-bindingRecommendations (on directors’ payand the independence of directors)were adopted and the Commissionestablished a new European CorporateGovernance Forum designed todisseminate best practice workingthrough existing national codes. TheDepartment also published consultationdocuments seeking views on proposalsfor five Directives which are currentlyunder negotiation.

11.21 In October 2004, the Minister of Statefor Industry and the Regions, JacquiSmith, set out the Department’sstrategy and objectives for EU companylaw in a keynote speech in The Hague.She made it clear that proposals underthe action plan must promotecompetitiveness through marketconfidence, extending investmentopportunities; increasing access tocapital; and facilitating cross borderrestructuring. She also underlined thatalternatives to legislation should beused wherever possible. In that contextshe particularly welcomed thecommission’s confirmation that it doesnot intend to create an EU Code onCorporate Governance and the setting

up of the Corporate Governance forumas a strong, independent voice of theEU market.

Takeovers Directive

11.22 After many years of negotiation, theTakeovers Directive12 finally completedthe European legislative process on21 April 2004. The Directive must beimplemented into national law by allMember States no later than 20 May2006. The Department issued aconsultative document13 on 20 January2005 setting out its proposals forimplementing the Directive with adeadline for comments of 15 April 2005.The principal issue addressed in theconsultative document is theGovernment’s intention to place theregulatory activities of the TakeoverPanel within a legislative framework andto give the Panel powers to makestatutory rules. This approach requiresprimary legislation which will beintroduced when Parliamentary timeallows. The legislative process will,however, need to be completed by20 May 2006.

Review of Shareholders’ Pre-EmptionRights

11.23 The Corporate Law and GovernanceDirectorate provided support to PaulMyners for his independent study intothe impact of shareholders’ pre-emptionrights on a public company’s ability toraise new capital. His report, publishedin February 200514, underlined theimportance of pre-emption rights forshareholders but made variousrecommendations for improving theway in which they operate in practice,in particular emphasising the need formore direct discussion betweencompanies and shareholders.


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12 Directive 2004/25/EC on Takeover Bids available atwww.europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=32004L0025&model=guichett

13 Implementation of the European Directive on Takeover Bids – A Consultative Document (URN 05/511) available at www.dti.gov.uk/cld/condocs.htm14 Full text available from www.dti.gov.uk/cld/public.htm


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Provision

Total 25.2 47.1 49.0 51.2 51.1

of which:Investor Protection 4.2 4 4 3.6 3.6

Financial Reporting and Company Law 3 5.5 3.9 5.2 5.2

Disqualification of Directors16 15.2 35.2 37.5 37.5 37.5

Late Filing Penalties 2.8 2.4 2.4 3.7 3.7

Expenditure on Corporate and Insolvency Activity Framework (£ million)15Figure 11.2:

15 All figures rounded to the nearest £100K16 The DTI Departmental Report 2004 stated that the Insolvency Service (InsS) would move to net funding regime from 1 April 2004 and showed no

planned expenditure thereon. This is the current position for Insolvency cases but disqualification of directors is a DTI programme for which weprovide funding to InsS to meet their costs

Introduction

Our challenge is to promotesustainability, including through thedelivery of the low carbon aims of theEnergy White Paper1, at least cost toUK business competitiveness, andimprove the contribution of businessto sustainable development.

12.1 DTI’s Sustainable Development Strategy2

was published in October 2000 followingconsultation with key stakeholders fromgovernment, business andenvironmental Non-GovernmentalOrganisations. The Strategy identifieswhere DTI can most make a differencein delivering the Government’ssustainable development goals. Its mainfocus is the need to accelerate thedecoupling of economic growth fromenvironmental degradation by improvingresource productivity. The Strategy setsout DTI’s role and priorities in enablingbusiness to improve resourceproductivity – focusing on climatechange and waste minimisation.

12.2 On 21 April 2004 the consultationdocument “Taking it on – developing UKsustainable development strategytogether” was launched. Theconsultation, which has now closed,sought views and ideas on a new UKstrategy for sustainable developmentfor the UK, ‘Securing the Future’3 whichwas launched in March 2005.

Plans for 2005/06

12.3 The DTI’s Business Plan 2005-084 setsout our plans to support sustainabilityand the environment and deliver PSA

target 45. We will:

▼ Work to reduce greenhouse gasemissions in line with our Kyotocommitment to cut them by 12.5%from 1990 levels; and move towardsa 20% reduction in carbon dioxideemissions from 1990 levels by 2010,through measures including support forrenewable energy and working withDefra and other Departments;

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Chapter 12

Sustainability and the Environment

Introduction

Plans for 2005/06


Climate ChangeRenewable EnergyEnergy and the EnvironmentCorporate Social ResponsibilityOther Key Legislative Developments

1 www.dti.gov.uk/energy/whitepaper/index.shtml2 www.dti.gov.uk/sustainability/strategy3 Full text available at www.sustainable-development.gov.uk/publications/uk-strategy/uk-strategy-2005.htm4 www.dti.gov.uk/about/dti-businessplan-2004-08.pdf. Summaries of delivery plans can be found at www.dti.gov.uk/about/dti-businessplan-2004-08-

summary.pdf5 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_4.pdf

▼ Increase the proportion of electricityproduced from renewable energysupplies, consistent with our widergoals for affordable and reliable energysupplies;

▼ Increase the business contribution tosustainable development and de-coupleeconomic growth from environmentaldegradation, ensuring EU Directives andother policies are negotiated andimplemented to achieve environmentalaims while maintaining competitiveness;and

▼ Minimise the numbers of environmentalincidents and the impacts of offshoredevelopments and regulate withoutundue burden on the industry ortaxpayer liability.



Climate Change

Agree on our National Allocation Planfor the EU Emissions Trading Scheme(EUETS) with both UK industry andthe European Commission (ETS tostart in January 2005).

12.4 DTI has worked closely with Defra todevelop the UK’s National AllocationPlan (NAP) for the EUETS. The UK hasbeen a leading advocate of the EUETS.We submitted a NAP to the EC on 30April 2004, setting out a provisionalallocation for installations covered in thefirst phase of the scheme, based oninterim projections of emissions.Subject to certain conditions the UKNAP was approved by the Commissionon 7 July 2004.

12.5 Work to update projections hassuggested that emissions by UKinstallations in the first phase (2005-07)would be some 56.1 million tonnes ofCO2 higher than previously estimated.On 10 November 2004 the Governmenthas submitted an amended NAP to theCommission, increasing the total numberof allowances by 19.8 million tonnes.The proposed approach means that thereduction on projected emissionsrequired of UK installations covered bythe scheme will be greater than in theApril NAP – UK installations will receiveallowances equivalent to around 5%below their projected emissions, ratherthan 0.7% under the original proposals.The proposed amendments are currentlyunder discussion with Commissionofficials.

12.6 On 11 March 2005 the Governmentannounced that it intended to issueallowances consistent with the levelapproved by the Commission, but thatlegal action against the Commission’srefusal to consider the proposedamendment to the NAP would beinitiated. Legal applications have beensubmitted to the Court of First Instanceand it is hoped that judgment of thecourt will be recieved in the first half of2006. Without prejudice to that legalchallenge, the Government publisheddetails of installation level allocations on24 May 2005. This was slightly laterthan originally planned and reflected theneed to make amendments to the UKNAP and a number of other issues,including requirements to verify baselinedata. This enables UK installations toparticipate fully in the trading scheme,including the spot market.

12.7 The UK has started the process ofpolicy development for Phase II of theETS, seeking initial comments on anumber of issues in the Climate Change

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129


Programme Review consultationpublished in December 20047. FurtherEUETS specific consultation will followshortly, aimed – where we can – atnarrowing down options for Phase II.

Renewable Energy

Develop an effective legislativeregime for offshore wind farms, aspart of the Energy Bill.

12.8 The Energy Act 20048 includesprovisions enabling the establishment ofa comprehensive regime for themanagement of offshore renewableenergy developments. The regime willcover licensing and consenting, safetyzones around installations, a legalframework for connections to theonshore grid and decommissioning.A key component is the creation of theUK’s Renewable Energy Zone beyondthe territorial sea through an Ordermade at the end of 2004.

Energy and the Environment

Ensure redundant oil and gasfacilities are decommissioned withproper regard for safety,environmental, economic andinternational requirements.

12.9 The DTI continued to approve thedecommissioning of redundant oil andgas facilities in line with safety,environmental, economic andinternational requirements. Steps weretaken to increase the transparency ofthe approval process for stakeholdersand industry. During 2004 the DTIapproved decommissioningprogrammes for recycling and disposalof the Brent flare and associatedfacilities and for the future reuse of theBeatrice field installations. Proposalswere also submitted to the DTI for

decommissioning of the North WestHutton platform and pipelines and theconcrete manifold and compressionplatform, MCP01.

Ensure EU Directives and otherpolicies are negotiated andimplemented to balanceenvironmental aims against coststo business.

12.10 Consultations took place during 2004on the proposed new EU Registration,Evaluation and Authorisation ofChemicals (REACH) regulation. Theconsultation document included a partialregulatory impact assessment indicatingcosts of approximately £515 million overthe 11-year implementation period ofthe regulation. Further work onassessing the impact is underway atEU and UK level, with a focus ondownstream users. The Governmentaims to achieve political agreement onthe REACH regulation during the UKPresidency of the Council in 2005.

12.11 DTI completed implementation of theEU End of Life Vehicles Directive, andconsulted on regulations to implementthe Waste Electrical and ElectronicEquipment and Restriction of HazardousSubstances Directives. Politicalagreement was reached by the EUCouncil of Ministers on the Energy-using Products Directive, and theFluorinated Gases Regulation (F-gasesare greenhouse gases with impactsmany times greater than CO2), on whichDTI worked jointly with Defra, in bothcases meeting key UK objectives.


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7 Consultation document available from www.defra.gov.uk/corporate/consult/ukccp-review/8 Full text at www.legislation.hmso.gov.uk/cuts/acts2004/20040020.htm

Take forward the EU’s Action Planon Environmental Technologies.This will lead to improvements inthe environment whilst also boostingthe competitiveness of companiesin the EU.

12.12 DTI has worked with Defra on the EUEnvironmental Technologies Action Plan(ETAP) where the UK is leading aworking group that is benchmarking ongreen public procurement across theEU. DTI and Defra have also worked ona UK position paper to recommendmodernisation of the environmentalstate aid guidelines as part of thereview proposed in the ETAP. Under theInnovation Review, DTI has undertakenthree projects on how environmentalregulations can be designed andimplemented so as to promoteinnovation (covering on eco-design ofTVs, vehicle emissions, and theimplementation of the Directive onIntegrated Pollution Prevention andControl). These will be published early in2005 with a business event to discussthe conclusions and next steps. Theconclusions will also be reflected in a“Think Innovation” guide forpolicymakers developing newregulations.

Corporate Social Responsibility(CSR)

Promote corporate socialresponsibility and de-coupleeconomic growth and environmentaldegradation.

12.13 The CSR Academy9 was launched inJuly 2004 with the aim of promotingskills and competencies related tocorporate responsibility including thefirst UK CSR Competency Framework.The Academy will be further developed

in 2005/06. Work continued jointly withDefra to implement the Government’s2003 Framework on SustainableConsumption and Production, with thesetting up of a sustainable consumptionroundtable, completion of a report onthe glass industry, and a scopingmeeting for a new business Task Force.DTI also held two workshops to obtainbusiness views on the new UKSustainable Development Strategylaunched in March 2005.

Key legislative developments

Energy White Paper

12.14 The Government’s first annual report onimplementing the Energy White Paper –“Creating a low-carbon economy”10

was published in April 2004. The reportcovers all four goals of the EnergyWhite Paper: sustainable, reliable,affordable energy supplies throughcompetitive markets. The Energy Act2004 is a major achievement for DTIand ensured that Better ElectricityTrading and Transmission Arrangementand the Nuclear DecommissioningAuthority went live on 1 April 2005,and should help maintain investorconfidence in renewables byestablishing a new regulatory regimefor offshore installations.

Sustainability and The Environment

131

9 www.csracademy.org.uk/10 Full text at www.dti.gov.uk/energy/sepn/annualreport/firstannualreportfull.pdf


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Provision

Total 25.3 23.3 99.0 69.0 69.0

of which:New & Renewables Barriers Busting – 0.5 10.6 10.6 10.6

Sustainable Energy Capital Grant12 7.6 8.5 38.0 38.0 38.0

Photovoltaic Grant Scheme 2.2 4.5 4.0 4.0 4.0

New & Renewables – Capital Grant (CMF/NFFO/PIF Source) 10.4 3.5 40.0 – –

Energy Efficiency R&D Fund – – – 10.0 10.0

Other 5.1 6.3 6.4 6.4 6.4

of which:Environmental Surveys 2.5 2.5 2.5 2.5 2.5

Chemicals Notification 0.5 1.0 0.7 0.7 0.7

Chemicals Notification – Appropriations in Aid -0.6 -1.4 -0.7 -0.7 -0.7

Consolidated Policy Studies Programme13 1.6 2.5 1.7 1.7 1.7

Offshore Aerial Surveillance 0.3 0.3 0.3 0.3 0.3

EU Emissions Trading Scheme – 0.4 – – –

Innovation Group 0.7 1.1 2.0 2.0 2.0

Expenditure on Sustainability and the Environment (£ million)11Figure 12.1:

11 All figures rounded to the nearest £100K12 Sustainable Energy Bid has been renamed Sustainable Energy Capital Grant13 Consolidated Policy Studies Programme comprises the former programmes Energy & Environment Research, Annual Energy Report, Payments to

ONS/SDR, MSO Consultancies and OG Economic Research (transferred from the Security of Energy Supply objective)

Introduction

Our challenge is to ensure thecontinuity and security of energysupply at affordable prices throughcompetitive markets, whilstminimising environmental impactsand delivering social objectives.

13.1 Maintaining security of energy suppliesis a major goal of the UK’s energy policyas set out in the 2003 Energy WhitePaper. The DTI’s activities in this areaaim to ensure sufficiently diverse secureand affordable energy supplies,including continuing to work for wellfunctioning UK, European and otherinternational energy markets andensuring the maximum benefit is gainedfrom domestic oil and gas production.

Plans for 2005/06

13.2 The DTI’s Business Plan 2005-081 setsout our plans to maintain the securityof energy supply and deliver PSA

Target 42. We will:

▼ Support well functioning UK energymarkets to ensure availability of supplyto meet demand at affordable prices;

▼ Maximise the economic benefit, andcontribution to security of supply, fromthe UK’s coal, oil and gas reserves; and

▼ Ensure the effects of significantdisruptions to electricity, gas, or oil(including petrol) supplies areminimised.



UK Oil and Gas Reserves

Exploit domestic oil, gas and coalproduction to the full to ensuresustained, long term, secureproduction.

13.3 During 2004/05 the drive to enhance theregulatory and commercial environmenton the UK Continental Shelf (UKCS) –in order to attract new investment andstimulate exploration, has continuedapace. Several initiatives under PILOT4,the high level Government and Industrybody, have, for example, seen major

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Chapter 13

Security of Energy Supply

Introduction

Plans for 2005/06


UK Oil and Gas ReservesStrong and Competitive Energy MarketsLiberalisation of EU Energy MarketsReconstruction of the Iraqi Oil Sector


2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_4.pdf3 See Annex B of DTI Business Plan 2004-07: ‘Summary of Objective Delivery Plans’ at www.dti.gov.uk/about/businessplan2004.pdf4 For further information please visit www.pilottaskforce.co.uk/

effort to ‘free up acreage’ – to ensurethat licensees give up assets they arenot developing (the ‘fallow’ initiative) –and to ensure that various commercialtransactions and arrangements toaccess infrastructure, such as pipelines,are facilitated and encouraged byindustry-agreed Codes of Practice andstandard Agreements. Work to ensureoptimum development of mature fields– the so-called ‘brownfields’ initiative –is also helping to ensure that theseassets will be managed in a way thatcontributes to maximising economicrecovery over the longer term.

13.4 The high level of interest in investing inthe UK’s oil and gas resources wasreflected in the number of applicationsfor licences in the 22nd OffshoreLicensing Round. 97 licences wereawarded – including 58 for the Promotelicence (first launched in 2003 toencourage smaller players), and 7‘frontier’ licences (licences with newlydevised terms that recognise thetechnical and environmental challengesof the area West of the Shetland Isles).12 of the ‘Promote licensees’ werecompanies new to the North Sea.

Strong and Competitive EnergyMarkets

Work with Ofgem and Energywatchto ensure electricity and gas marketsdeliver secure energy at competitiveprices.

13.5 The Department has worked withOfgem5, Energywatch6 and industry toaddress shortcomings in the customertransfer process, with a view to avoidingerroneous transfers and improvingswitching arrangements. The sameparties are now working together toaddress the third large consumercomplaint category, that of billing and

metering. DTI also encouraged theindustry to improve the arrangementsgoverning gas and electricitydisconnections. In September 2004, theindustry put in place arrangements thatshould, as far as possible, avoid thedisconnection of vulnerable customers.This group of initiatives is improving theoperation of the market: during 2004/05,Energywatch expects to receive 74,000customer complaints, compared with87,000 in 2003/04 and 110,000 in2002/03.

13.6 DTI continues to promote access in themarket. In November 2004, PatriciaHewitt and Mike O’Brien led an EnergyConsumer Event which encouragedcustomers to maximise savings byswitching supplier and paymentmethod, taking energy efficiencymeasures and accessing suppliers’social programmes. This activity isparticularly pertinent at a time whensuppliers have increased domestic gasand electricity prices as a result ofincreases in wholesale prices. DTI isseeking to use all possible marketmeasures to mitigate the effects ofthese rises on all domestic consumers,and especially the vulnerable. TheGovernment is also in dialogue withindustrial consumers about the scopefor market improvements.

13.7 DTI shares responsibility with Defra toeradicate fuel poverty as far asreasonably practicable by 2010 amongstvulnerable households and by 2016 forall households. Good progress had beenmade towards this goal7 and, whilerecent rises in energy prices will havemade it more difficult to achieve ourfuel poverty targets, the negative impactof rising prices will be partly offset byrising incomes, and will be relatively


134

5 Further information about OFGEM can be found at www.ofgem.gov.uk/ofgem/index.jsp6 Further information about Energywatch can be found at www.energywatch.org.uk/7 See paragraph 2.67 in Chapter 2 ‘Progress on delivering PSA targets’

small compared to fall in the number ofhouseholds in fuel poverty between1996 and 2002.

Open up the Scottish electricitymarket to competition and deliveringother regulatory enhancementsassociated with the Energy Bill byApril 2005.

13.8 The project to open up the Scottishelectricity market and create GreatBritain-wide transmission and tradingarrangements is on track. The necessaryprimary legislation received RoyalAssent under the Energy Act in July2004, Ministers took the decision todesignate the legal framework for“Go Active” in September 2004, andthe project is on track to “Go Live”on 1 April 2005.

13.9 The Energy Act contained a number ofother provisions to improve theregulatory framework. A specialadministration regime, designed tosafeguard security of energy suppliesif certain energy companies becomeinsolvent, is already in place. We arecurrently consulting on an appealsmechanism against certain Ofgemdecisions, and a scheme to provideassistance for an area with highelectricity distribution costs, both ofwhich are on track to come into forcein spring 2005.

Maintain, improve and exercise ourplans for avoiding and/or mitigatingthe effects of a gas, oil or electricityemergency.

13.10 The Downstream Oil EmergencyResponse Plan was exercised in May2004 in a desktop scenario namedExercise Aphid. Learning from this andfrom other sources has being includedin a full update of the Plan.

Reach agreement on the detail of theoil and gas treaty to provide aframework for co-operation on cross-border projects, including gaspipelines, and facilitate access toNorwegian gas for UK consumers.

13.11 The new framework Agreement willremove the need to negotiate aseparate agreement for every cross-boundary oil and gas project. It willfacilitate the new Langeled South(previously named Britpipe) pipelineproject to deliver Norwegian gas to theUK from October 2006 which will meetup to 20% of the UK’s peak gasdemand and facilitate a number of oiland gas field developments thatstraddle the median line betweenNorway and the UK. (Note – the treatyshould be agreed by the time the reportis published but has not been yet – textwill need to be finalised later.)

Liberalisation of EU EnergyMarkets

Continue to work to delivercompetitive EU energy markets andfair access to international markets,including access for UK suppliers (fullopening of non-domestic markets byJuly 2004 and domestic markets byJuly 2007).

13.12 Against the background of higher fuelprices in the UK and elsewhere, the DTIis promoting the development ofcompetitive markets in the UK, Europeand beyond, and diversity of importsources of gas to deliver securesupplies at competitive prices. Therehas been some progress towardsliberalisation of EU markets, but we aremonitoring the implementation of theEU energy liberalisation package andwill urge the Commission to takeenforcement action where necessary.In particular, Ofgem and the DTI areencouraging the Commission to carry

Security of Energy Supply

135

out a sectoral review of the gas marketto identify and remedy any anti-competitive practices. We are alsoworking with investors to facilitate keyinfrastructure projects which will createa downward pressure on prices andhave reached agreement on newsupplies including a new gasInterconnector Treaty between theNetherlands and the UK.

Reconstruction of the Iraqi OilSector

Play our part in ensuring that energyresources of Iraq are properlymanaged in the interests of thepeople of Iraq.

13.13 We are working on proposals with theIraqi Ministry of Oil which focus ontraining initiatives to meet themanagement, strategic and

technological challenges facing therehabilitation of the Iraqi oil sector.Central to this work is the promotion of the principles of good governance –based on international best practice – in all areas of the Ministry’s operations.


136


Provision

Total9 6.8 6.8 6.2 5.3 5.3

of which:Oil Gas Maximising Recovery Programme 2.7 2.7 2.5 2.5 2.5

Other 4.1 4.1 3.8 2.8 2.8

of which:Offshore Geology 0.7 0.7 0.7 0.7 0.7

OG Competitiveness 1.2 1.7 1.9 1.5 0.7

OG Payment to CSO 0.0 0.0 0.0 0.0 0.0

UNCLOS 0.0 0.0 0.1 0.1 0.1

Delimitation Survey 0.0 0.0 0.0 0.0 0.0

Oil and Gas Gazette 0.1 0.0 0.0 0.0 0.0

European Energy Charter 0.3 0.3 0.3 0.3 0.3

International Energy Agency 0.9 0.9 1.0 0.8 0.8

Energywatch – pensions 0.0 0.0 0.0 0.0 0.0

Energywatch 12.0 12.4 13.3 13.1 13.1

Licence Fee Receipts -12.0 -12.4 -13.3 -13.1 -13.1

Expenditure on Security of Energy Supply (£ million)8Figure 13.1:

8 All figures rounded to the nearest £100K\p9 OG Economic Research is now covered in Sustainability and the Environment chapter

Introduction

Our challenge is to ensure nuclearsecurity and safety and effective andefficient DTI contribution topreventing proliferation of arms andother strategic goods.

14.1 The DTI’s role in the development of theUK’s nuclear industry is a varied one,encompassing industry ownership andsupervision and regulatory activities toprotect the public and internationalsafety as well as providing technicalassistance to the Former Soviet Unionand Eastern European countries.

14.2 The UK’s strategic export controls arebased on national and internationalcommitments concerning transfers ofconventional weapons, missiles,chemical and biological weapons andnuclear-related goods and technology,and components thereof. Thecommitments are enshrined insecondary legislation in two control liststhat are updated periodically to reflectchanges in these regimes. The UK alsocontrols goods which are not on thedual-use list but which may be used inconnection with a Weapons of MassDestruction (WMD) programme.

Controlled goods may not be exported,except with a licence issued by theDepartment, working in conjunctionwith other Government Departments,particularly FCO, the Ministry ofDefence (MoD) and DfID, in issuing orrefusing them.

Plans for 2005/06

14.3 The DTI’s Business Plan 2005-081 setsout our plans to maintain nuclearsecurity and export control. We will:

▼ Process export licence applicationspromptly and accurately and improvethe service we offer to exporters;

▼ Contribute to the Government’s counter-proliferation effort through CabinetOffice machinery; and

▼ Continuously improve the framework foreffective and proportionate regulation ofnuclear safety and security, achieving afavourable international peer review ofUK safety regulatory systems; amendthe Nuclear Industry SecurityRegulations; and make progresstowards deployment of armed police atnuclear power stations.

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Chapter 14

Nuclear Security and Export Control

Introduction

Plans for 2005/06


Export ControlsThe Nuclear Legacy of the Former Soviet Union Nuclear Safety, Security and Third Party Liability




Export Controls

Deliver an export licensingperformance improvement project(JEWEL) to create a joined-up exportlicensing community acrossGovernment.

14.4 The JEWEL project has beenimplemented, except for IT aspectswhich are ongoing, and has been a majorcontributor to meeting Key PerformanceIndicators (KPIs) and creating scope forefficiency savings. KPIs for processing ofapplications and ratings have been metor exceeded in calendar year 2004. HMGprocessed 78% of standard individualexport licence applications in 20 days in2004, against a target of 70%; and 98%in 60 days, against a target of 95%.JEWEL has created a single licensingcommunity through the establishment ofjoint management structures, jointinduction and new business processes.We are also studying how to achievemore joined up IT for processing licenceapplications.

Introduce new controls under theExport Control Act from May 2004.

14.5 New controls were introduced on thetrafficking and brokering of militaryequipment, on electronic transfers ofmilitary equipment, on intangibletransfers of WMD-related technologyand on technical assistance to WMDprogrammes. The Act also consolidatedcertain measures concerning thetransparency of the export licensingsystem which HMG had been followingas a matter of best practice.

The Nuclear Legacy of the FormerSoviet Union

Lead an interdepartmentalprogramme to mitigate the nuclearlegacy of the Former Soviet Union.

14.6 The DTI manages, on behalf of the UKGovernment, a £32.5 million per annumprogramme to address nuclear cold warlegacy issues in the Former SovietUnion (FSU). The programme is part of aG8 initiative to reduce the global threatposed by the spread of weapons andmaterials of mass destruction and thePrime Minister has committed up to£750 million to this work over the period2003-2013.

14.7 Following the establishment of a robustproject management structure for theprogramme and completion of legalAgreements with the RussianFederation in 2003, a major portfolio ofprojects was initiated during 2004/05.Key projects underway or completedduring 2004/05 include:

▼ The successful completion, to timeand cost of dismantling two Russiannuclear submarines at a cost of some£11.5 million;

▼ The start of constructing a £15 millionspent nuclear fuel storage facility atMurmansk;

▼ Successful completion of the firstprojects to prepare for the safe andsecure storage of some 20,000 spentnuclear fuel assemblies at AndreevaBay; and

▼ Initiation of the first of our nuclearsecurity projects in Russia andimplementing a guards trainingprogramme based at Sellafield to helpenhance security at nuclear facilitiesin Russia.


138


14.8 In addition to these projects wesuccessfully negotiated an Agreementwith Norway on collaboration on jointprojects in Russia, signed an Agreementwith the Russian Federation to help withthe retraining of former weaponscientists, and an Agreement with theUS to participate in a project to closedown a Russian weapon plutoniumreactor. We also successfully negotiatedan amendment to the main bilateralAgreement with the Russian Federationto include work on nuclear security andnuclear safety.

14.9 A detailed report reviewing progressduring 2004 and plans for 2005 waspublished in December 2004, ‘The G8Global Partnership, progress during2004 on the UK’s programmes toaddress nuclear, chemical and biologicallegacies in the Former Soviet Union’3.DTI prepared and published this reporton behalf of the FCO and MoD. Thedocument also sets out the long-termpriorities for the programme andincludes a description of the projectsunderway4.

Nuclear Safety, Security andThird Party Liability

Establish Civil Nuclear Constabularyas a stand-alone force.

14.10 Necessary transfers from UKAEA havetaken place and the Civil NuclearConstabulary has been set up as astand-alone force. A new PoliceAuthority has been formed to supervisethe activities of the new force.

Work with British Energy to secure itssafe and cost-effective continuedoperation.

14.11 During 2004 the Department continuedto support the proposed restructuring ofBritish Energy (BE) in accordance withits overriding priorities of nuclear safetyand the security of electricity supplies,and on the terms set out by theSecretary of State on 28 November2002. A key milestone was passed on22 September 2004 when the ECapproved the Government’sRestructuring Aid to BE. Under EC rules,no further drawings can be made afterthat date on the Credit Facility whichthe Government had made available toBE since September 2002. All drawingson the Facility have been repaid withinterest by BE.

14.12 On 5 May 2004, the Secretary of Stateannounced that following a review ofspecial shares in energy companies, inthe light of a European Court of Justicejudgment in May 2003, the Governmentplanned to retain its special shares inBE but with modified powers. Only twoprovisions of the existing special sharesin BE remain. These are therequirements of Ministerial consent foranyone to purchase more than 15% ofBE’s issued shares, and for the disposalof a nuclear power station by BE. Bothof these provisions have been amendedto ensure that Government consent canonly be refused on grounds of nationalsecurity.

14.13 British Energy plc successfullycompleted its restructuring on14 January 20055.

Nuclear Security and Export Control

139

3 Full text at www.dti.gov.uk/energy/nuclear/fsu/news/second_annual_report.pdf4 Copies of the report and further details of projects underway are available from www.dti.gov.uk/energy/nuclear.fsu5 See Anex C6 for a summary of the Public Accounts Committee (PAC) Report on the nuclear liabilities of British Energy plc.


140


Provision

Total 65.5 58.4 54.4 51.4 53.7

of which:Export Licensing via Internet Service (ELVIS) Project 0.1 0.5 0.8 0.8 0.8

Nuclear Support to the Former Soviet Union 42.1 32.2 32.2 32.2 32.2

Nuclear Energy Agency subscription 0.5 0.5 0.3 0.3 0.3

International Subscriptions (non-proliferation) 15.7 17.9 21.2 18.2 18.2

Emergency Planning Work 2.1 .2 0 0 0

British Energy Crisis Team 4.9 7 0 0 0

Expenditure on Security of Energy Supply (£ million)6Figure 14.1:

6 All figures rounded to the nearest £100k.

Introduction

Our challenge is to deliver safe,economic, efficient and effectivemanagement of departmental (and,where relevant, Government) assetsand liabilities and to become a centreof excellence within Government oncorporate finance and governanceissues.

15.1 The Department manages variousassets and liabilities on behalf of theGovernment, including nuclear liabilities,residual liabilities arising from the coal,steel and shipbuilding industries andshareholdings in a number of Governmentowned businesses, including Royal Mailand British Nuclear Fuel Plc (BNFL).

15.2 The Shareholder Executive was set up inSeptember 2003 to provide professionalexpertise and advice to the shareholdingfunction in a wide range of Governmentowned businesses. It transferred to theDTI in June 2004 to take directresponsibility for the management of theDTI’s shareholdings in Royal Mail plc andBNFL plc together with its ownership ofUKAEA and ECGD. In November 2004the Industrial Development Unit (IDU)became part of the Shareholder

Executive with the objective of providinga corporate financial centre of excellencecapable of being deployed throughoutWhitehall.

Plans for 2005/06

15.3 The DTI’s Business Plan 2005-081 setsout our plans to improve themanagement of our assets and liabilitiesand deliver PSA Target 112. Throughactive stewardship we will:

▼ Ensure the Nuclear DecommissioningAuthority (NDA) makes early progress intackling the historic nuclear liabilitiesthrough the introduction of competitionand improved project managementtechniques;

▼ Ensure the NDA makes progresstowards the PSA target of reducing thecivil nuclear liabilities by 10% by 2010;and

▼ Deliver coal liabilities through effectivemanagement of the health andconcessionary coal schemes (includingradical change to the lung diseasescheme); manage the pension fundsand, acting through the Coal Authority,tackle minewater pollution andsubsidence hazards.

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Chapter 15

Assets and LiabilitiesIntroduction

Plans for 2005/06


Nuclear LiabilitiesCoal Health LiabilitiesOther Residual Industrial LiabilitiesPostal ServicesThe Shareholder Executive


2 See Chapter 2 for a summary of SR2004 PSAs. Full text and technical note at www.dti.gov.uk/pdfs/psa_11.pdf

15.4 In addition, to professionaliseGovernment management of itsshareholdings, we will:

▼ Enhance the value of the ShareholderExecutive’s 6 core portfolio companies(Royal Mail, BNFL, QinetiQ, NATS, RoyalMint and CDC) by £1 billion by 2007 byimproving the professional managementof those businesses; and

▼ Apply professional expertise to themanagement of other businessesowned by Government in order toimprove value.



Refocus BNFL and UKAEA to reflectthe establishment of the NDA.

UKAEA

15.5 During 2004/05 we have operated thedecommissioning programme at UKAEAin accordance with NDA contractprinciples and practices thus providing a‘shadow year’ of operation inpreparation for the NDA. This has


142

PRIORITY ACTION 2004/05: Drive forward the decommissioning and clean-up of the

UK’s civil nuclear sites by establishing the NDA by April 2005.

Royal Assent to the Energy Act in July 2004 allowed us to proceed with the appointment ofthe NDA’s Chair in August 2004, and six non-executive Board directors in September 2004with the Chief Executive appointed in October 2004. The NDA’s recruitment of its eight-strong executive team was completed in January 2005.

In December 2004 the Chief Executive was appointed as the NDA’s Accounting Officer, and theNDA allocated a budget of £14 million for its operations up to the end of the financial year. TheChief Executive was charged with the task of setting up financial reporting and control systems(including ITC and other facilities), implementing the corporate governance arrangements agreedin conjunction with DTI and Scottish Executive, planning for the transition to the new site clean-up contracts, completing the recruitment of NDA executives and staff, and developing keypolicies for fulfilling the NDA’s functions.

The Nuclear Decommissioning Authority (NDA), was formally established under the EnergyAct 2004 on 1 April 2005 as scheduled. The Government has approved its first Annual Planand the NDA is now responsible for ensuring that the Government’s civil nuclear legacy,which previously was the responsibility of BNFL and UKAEA, will be cleaned up safely,securely, cost effectively and in ways that protect the environment. The NDA will providestrategic direction for this work across the UK.

The Government notified the European Commission in December 2003 that it intended toprovide state aids to the NDA. The aid relates to the cost of decommissioning the commercialactivities by BNFL companies. The Commission continues to investigate the case. An interimsolution is in place to ensure that only existing resources are used to fund NDA activities atBNFL sites.

Nuclear Liabilities


extended to assessing the performanceof UKAEA and the determination ofbonus earned by staff, against the sametype of Performance Based Incentivesthat will form the basis of the NDAcontract from 1 April 2005. We havealso initiated a Strategic Review of all ofUKAEA’s business operations in thesecond half of the year. The results ofthis Review have yet to be finallyprepared and considered by Ministersbut the outcome will be a Business Planfor UKAEA that will determine howUKAEA should best prepare itself forthe competitive NDA era.

BNFL

15.6 The Department has continued to workclosely with BNFL to restructure thecompany in line with the conclusions ofthe Joint Strategy Review published inDecember 2003. In May 2004, BNFLlaunched British Nuclear Group, thenuclear clean-up business that will bethe focus of the successor group ofBNFL companies, and we achieved therestructuring necessary to enable theNDA to become operational in April2005.

Coal Health Liabilties

Settle coal health compensationclaims efficiently and effectively.

15.7 The Chronic Obstructive PulmonaryDisease (COPD) scheme was closed tonew claims at the end of March 2004,with 570,000 claims received in total.In 2004 over 70,000 full and final offerswere made on COPD claims, anincrease of 10,000 on 2003. To date,the Department has made over 250,000payments under the COPD scheme,with over 207,000 individual claimssettled and £1.4 billion in compensationpaid to claimants.

15.8 The Department, in conjunction withminers’ solicitors and the judge incharge of the scheme, has beenseeking ways to speed up the claimsprocess, resulting in the introduction ofnew fast track offers for claimantswhich will potentially reduce the timetaken to make offers by up to twoyears. It is estimated that around200,000 claimants could benefit fromthe offers in due course.

Assets and Liabilities

143

Decommissioning and environmental restoration 326

Fusion research 55

UKAEA Constabulary 18

Other 8

Total 407

UKAEA analysis of turnover 2004 (£ million)Figure 15.1:

Turnover 2,322

Loss on ordinary activities before taxation and exceptional items (303)

Exceptional profits/(charges) 4

Loss on ordinary activities before taxation (299)

(Decrease)/increase in cash (128)

BNFL Financial Data 2004 (£ million)Figure 15.2:

15.9 During 2004 the DTI targets forVibration White Finger (VWF) changedto focus on the number of GeneralDamages claims that had yet to receivean offer. 57,000 such claims werereviewed and in excess of 11,000 offerswere made. The Department has nowsettled 75,000 claims with over£1.1 billion in compensation havingbeen paid. During the year cut-off dateswere agreed for Wage Loss and Group3 claims (end of January 2005 and endof June 2005 respectively).

15.10 Loss of Services claims are now beingprocessed with 7,000 offers beingmade. Currently up to 50,000 claims arepredicted. The cut-off date for liveclaims has been agreed for end ofMarch 2005.

Other Residual Industrial Liabilities

Delivered National ConcessionaryFuel Scheme to 120,000 people in linewith national agreements.

15.11 At the end of 2004 there were 120,000beneficiaries of the concessionary fuelscheme, providing concessionary fuel tothe former employees of the BritishCoal Corporation (BCC), of whom33,000 took solid fuel and the remaindertook the cash in lieu alternative. The DTIwill spend some £25 million thisfinancial year on purchasing fuel and asimilar amount on cash in lieupayments.

Meet obligations and enforce rights inrespect of former British CoalCorporation assets and non-healthemployee and commercial claims.

15.12 Approximately £65 million has been paidto 48,000 members of the MineworkersPension Scheme (MPS) who qualify forpayments under the DTI’s low PensionAward benefit package. Work to trace

other eligible individuals whose contactdetails were not available is continuingand due to be completed by July 2005.

15.13 The triennial valuation of the British CoalStaff Superannuation Scheme reporteda deficit (as did the MPS in 2003)following the decline in world stockmarkets. However, the value ofmembers’ pensions has been protectedunder the Government guarantee ofbenefits agreed at the time ofprivatisation. Not only will basicguaranteed pensions increase withinflation, in total bonuses awarded fromprevious valuation surpluses willcontinue to be paid at current levels.

15.14 The recent expansion of the CoalAuthority’s minewater treatmentprogramme has been consolidated andeight new schemes are now beingimplemented annually. A strategicupgrade of the mining reports servicefor house purchasers has beenimplemented and over 70% of reportsare now issued electronically.

15.15 The Dismissed Miners CompensationScheme ended in March 2004.It provided pension enhancements for144 miners dismissed by the BCCduring the 1984/85 strike and notsubsequently re-employed by thecorporation, and who had not engagedin serious acts of violence orintimidation, or actions whichjeopardised the safety of others.The cost of the scheme was in theregion of £2 million.

15.16 The Coal Industry Social WelfareOrganisation (CISWO) was a formersocial welfare arm of the BCC and isnow a charitable trust. A £1.4 millionpackage of funding has been providedto help CISWO to continue to provideimportant welfare services in the


144

coalfields areas over the next ten years.The last payment is due to be made inMarch 2005.

Postal Services

Develop future strategy for Royal Mailand post office network by April 2005.

15.17 In September 2004, DTI announced thatthe Government had decided, subject tosecuring any further necessary state aidclearance from the EC, to extend itstransitional financial facility for rural postoffices for two further years from 2006until 2008. Up to a maximum of £150million a year until 2008 will be madeavailable to enable Post Office Ltd tocontinue to meet the cost ofmaintaining the non-commercial part ofthe rural post office network and to pilotnew ways of delivering services.

15.18 By March 2005, the DTI fundedrestructuring of the urban post officenetwork was virtually completed. Thisfulfils a recommendation made by thePolicy and Innovation Unit that involvedsome £210 million support towards therestructuring.

15.19 Royal Mail’s 2004/5 results (published inMay 2005) confirmed the successfulcompletion of its 3 year renewal plan

which began in 2002 when thecompany was losing £1m a day. Profitsfrom operations in 2004/5 were £537m.A price increase of 1p for 2nd class postin April 2004 and volume growthcontributed to this performance butefficiency savings by Royal Mail,particularly in the cost of delivery andtransport, were also a contributingfactor. Regrettably, Royal Mail’s qualityof service dipped in the early part of theyear as the company implementedmassive changes to its operations.Towards the end of the year, however,quality of service was significantlyimproved as the Board made this theirtop priority. Royal Mail had its best everChristmas, with a 10.6% increase inrevenue over the previous year. RoyalMail now has a strong platform for thebusiness as it faces the new challengesof a liberalised postal services market.

15.20 The DTI is involved in the process toreview Royal Mail’s strategic directionfollowing the completion of the 3-yearrenewal plan in March 2005. There hasbeen active dialogue with the companyto assess the emerging plans from avalue, regulatory, deliverability and policyperspective.


145

Financial targets4 Outturn

2003/04 Group profit target 42 2205

2004/05 Group profit target 257 537

Royal Mail financial targets 2004 (£ million)Figure 15.3:

4 These were the targets set in the 2002 interim strategic plan5 This is the underlying profit before exceptional items, pension benefit/charge and share of profit/loss in associates and joint ventures (including non-

exceptional impairment of goodwill)

The Shareholder Executive

15.21 Whilst taking on direct responsibility forthe management of DTI’s shareholdings,the Shareholder Executive hascontinued its role in advisingGovernment departments on how to actas a more effective owner ofbusinesses and has responsibility fordirectly managing the shareholderrelationship for a number of otherDepartments’ business. These are:Royal Mint and Partnerships-UK (for HMTreasury), NATS (as part of a joint teamwith Department for Transport) andActis (for DfID).

15.22 The Shareholder Executive is engaged in aportfolio of around 25 businesses (whollyor partially owned by central Government)that has a combined turnover of over £18billion. It has an objective of enhancing, forthe benefit of taxpayers, the value of thekey businesses in its portfolio by £1billionby 2007.

15.23 Areas where the Shareholder Executivehas been active include:

▼ Advising Defra on the BritishWaterways end to end review andassessing proposals for strategicpartnerships;

▼ Advising the Home Office on thevesting the Forensic Science Serviceinto a Government Owned Company;

▼ Leading the vesting of the Royal Mintinto a Government Owned Company;

▼ Leading certain aspects of the review ofthe BBC Charter; and

▼ Taking seats on the Boards of QinetiQand Partnership-UK


146

2003/04 outturn

Profit and loss 537

Gross Capital Expenditure 219

Net Capital Expenditure 124

Cost of capital charge 1918

Royal Mail expenditure (£ million)6Figure 15.4:

6 Profit/loss, capital expenditure and cost of capital charge forecasts for forward years are commercially confidential and are shown by 2004/05 only.7 See note 5 above8 Based on net assets of £2,385m and using a standard HMT rate of 8% of net assets


147


Provision

Total Resource DEL 279.8(a) 404.2(a) 993.1 1330.4 1279.2

Of which:Nuclear Decommissioning Authority(a) 0 0 917 1059.5 1014

UKAEA(b) 198.9 304 9.9 9.4 5.9

Britsh Energy – Historic Liabilities 0.0 0 195 200

Coal Authority 26.0 26.8 27.0 27.0 25.5

ECGD 0.0 0 5 5 0

Post office 0 1.3 1.8 1.8 1.8

Other(c) 31.5 32.2 32.4 32.7 32.1

Total Resource AME 4,772.5 -35.7 127.2 121.4 115.3

of which:Health claims and associated expenditure – non cash 941.4 -220.0 -11.4 -12.7 -13.5

Of which, increase/(decrease) in Provision – 664.6 -341.6 0.0 0.0 0.0Cash expenditure (excluded from resource cost) 894.3 888.6 938.0 938.0 938.0

Coal Operating Subsidy – non cash 0.4 0.5 0.0 0.0 0.0

Cash expenditure (excluded from resource cost) 0.0 0.8 0.0 0.0 0.0British Coal Corporation external finance – non cash 0.3 0.0 0.0 0.0 0.0

Cash expenditure (excluded from resource cost) 0.0 0.0 0.0 0.0 0.0Coal Privatisation – indemnities – non cash 0.0 -0.2 0.3 0.0 0.0

Cash expenditure (excluded from resource cost) 0.0 0.0 5.0 0.0 0.0Coal Privatisation – Avenue Cokeworks – non cash 0.0 10.0 0.1 0.1 0.1

Cash expenditure (excluded from resource cost) 0.0 0.0 13.9 13.9 13.9BNFL/Magnox decommissioning – non cash 2,538.8 170.6 183.7 183.7 183.7

Cash expenditure (excluded from resource cost) 0.0 0.0 0.0 0.0 0.0Managing nuclear liabilities 1,291.6 3.4 -45.4 -49.7 -55.0of which:UKAEA Decommissioning – non cash(d) 1,281.3 -2.8 -46.8 -51.3 -56.1

Cash expenditure (excluded from resource cost) 305.6 312.4 292.5 292.5 292.5UKAEA Other – non cash(d) 10.3 6.2 1.4 1.6 1.1

Cash expenditure (excluded from resource cost) 9.8 11.2 9.9 14.8 6.3

Expenditure on Assets and Liabilities (£ million)Figure 15.5:

a The Nuclear Decommissioning Authority has been established to take responsibility for the UK's civil public sector nuclear liabilities, and went liveon 1st April 2005. Figures for 2003-04 and 2004-05 include expenditure leading to the establishment of the NDA.

b UKAEA reduction in baseline provision from 2005 reflects the restructuring following the establishment of, and transfer of responsibilities to, theNDA.

c Includes the non-cash implications relating to Concessionary Fuel, and British Coal pension investments.d Future projections for UKAEA provisions do not yet allow for the intended transfer of responsibilities to the Nuclear Decommissioning Authority

from 2005.

The Small Business Service

16.1 The Small Business Service (SBS)1 isincluded in the Department’s grossadministration cost provision. It waslaunched as an executive agency on1 April 2000. In December 2002 theSBS published ‘Small Business andGovernment – The Way Forward’2 whichset out a new policy framework for aGovernment-wide approach to helpingsmall businesses. It identified sevenstrategic themes as key drivers foreconomic growth, improved productivityand a wider involvement in enterprisefor all. Building on this policyframework, in January 2004 the SBSpublished ‘A Government action planfor small business – Making the UK thebest place in the world to start andgrow a business’.3

16.2 During 2004/05, the SBS has drivenforward the Government Action Plan;successfully launched thewww.businesslink.gov.uk web portalthat joins up national e-governmentservices for the UK’s SMEs, providing asingle access point to information fromGovernment Departments; led agovernment consultation on the scopefor introducing commoncommencement dates for regulatorychanges to new areas of domestic law;and taken steps to devolveresponsibility for the management ofBusiness Link to the RDAs from 1 April2005 following the announcement madein the Budget 2004.

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Chapter 16

The Executive AgenciesThe Small Business ServiceCompanies HouseThe Patent OfficeThe National Weights and Measures LaboratoryThe Insolvency ServiceThe Employment Tribunals Service

1 Further details about The SBS and its activities, including its Annual report, can be found at: www.sbs.gov.uk and in Chapter 5 ‘Enterprise, Growthand Business Investment’

2 Full text available at: www.sbs.gov.uk3 Full text available at: www.sbs.gov.uk


149

Key Performance Indicator Outturn and comment for 2003/04

Roll out in three stages by March 2004 the new

DTI business support portfolio using Business

Link (both the website and the face to face

service) as the primary means by which

businesses access DTI’s products and services.

Increase the market penetration of Business Link

from the current rolling average of 16% up to 22%

and the customer satisfaction rate of those using

Business Link from 82% to 87% by March 2004.

Evaluate the three RDA-led business support

pilots in the North West, West Midlands and

East Midlands, providing an initial comparison

of participating and non-participating regions,

by January 2004.

The e-Services element is the Business SupportDirectory was launched on schedule in April 2003and coverage was expanded from 140 to some 550schemes, covering virtually all national level andDevolved Administration schemes.

Market penetration amongst businesses increasedfrom 17% in 2002/3 to 24% in 2003/4. Customersatisfaction improved from 84% to 88%.

At the end of March 2004, market penetration(using the improved measure that reflects supportgiven to pre-starts as well as businesses) was 34%.

Launch Phoenix Development Fund – ‘Building

on the Best’ – projects by December 2003.

Reduce the gap between VAT registrations in

the 20% most deprived local authority areas and

the 20% least deprived areas by 1%.

Results of the second, and final bidding round wereannounced in December 2003.

There was a 2.1 percentage narrowing of the gapover the period 2000 to 2003.

Deliver the current range of interventions to

improve the availability of small business

finance, including rolling out the Early Growth

Funding programme and the Regional Venture

Capital Funds by March 2004.

7 Early Growth Funds, including 1 nationaltechnology project, were operational by March2004.

Regional Venture Capital Funds were operating ineach of the nine English regions by March 2004.

Implement a new grant for research and

development (the successor to Smart), support

700 projects under the new scheme, pilot a new

grant for ‘innovation capability’ and reposition

and increase the profile of the Smart

Achievement Awards by March 2004.

The target of supporting 700 new R&D projectswas achieved, although these were a mixture ofSmart and Grant for R&D projects. UnderInvestigating an Innovative Idea,150 grants weremade.

Review the available research evidence on the

factors, which determine a small business’s

capability to grow, map the interdependence of

these factors and, by March 2004, publish a

‘capability for growth’ strategy.

A strategy for building the capability for SMEgrowth was published in January 2004 as part ofthe government action plan for small businesses.

Ensure that ‘Enterprise Shows’, bringing

together government and private sector service

providers to help those thinking of starting a

business, are held in at least five regions by

January 2004.

RDAs developed plans for organising EnterpriseShows in their regions in 2004. Some events wereheld as part of the inaugural national EnterpriseWeek in November 2004.

Work with key government departments such

as DfES, DWP and HM Treasury to build a

comprehensive, cross-government strategy to

support an enterprise culture by January 2004.

A government action plan for small businesses waspublished in January 2004. A wide range ofgovernment departments, agencies and deliverypartners were involved in developing the ActionPlan. A detailed Implementation Plan was alsoagreed with relevant departments, including DfES,DWP, HMT, IR and HO.

Terms of reference were agreed for the review of‘routes off benefits into self-employment’.

SBS performance against targets for 2003/04Figure 16.1:


150

Work towards securing formal Investors in

People recognition by June 2004.

In 2003/04 we developed a HR strategy to supportthe business, including the development of acapabilities framework.

Publish and promote a No-Nonsense Guide to

Government rules and regulations for setting up

your business in print and via the web by April

2003.

Draw up, with other departments, an action

plan to deliver significant improvements in

government’s performance in relation to the

regulatory environment for small business for

publication by November 2003.

Published in May 2003. Over 150,000 copies of theguide had been distributed by end of March 2004.The guide is also on www.businesslink.gov.uk.

Progress was made on a cross-government actionplan for reducing regulatory impacts on smallbusinesses, particularly with the Inland Revenue,Customs and Excise and the Department forEnvironment and Rural Affairs. Detailed reformmeasures were identified in the Regulatory ReformAction Plan published in December 2003.

Stages one and two of the evaluation of the RDA-led business support pilots were completed inJanuary 2004. RDA management of local BusinessLink services was announced in March. We areworking with all nine RDAs to consider ways inwhich we can evaluate their arrangements fordeveloping business support services in theirregions, as they work towards taking over contractmanagement of their BLOs.

Key Performance Indicator Outturn and comment for 2004/05

Ensure by March 2005 that Business Link (both

the website and the face-to-face service) is

effectively promoting and delivering the DTI’s

new portfolio of business support products –

particularly those relating to innovation,

knowledge transfer and best practice.

Business Link advisers trained. A Technology andDesign workshop involving the Design Council,Regional Development Agencies and Business LinkOperators explored methods of brokerage in theinnovation and technology area and has beenfollowed up with interested parties. From February2005, in association with the Patent Office,Business Link advisers are being offered IntellectualProperty Rights training. Further training is alsobeing provided on DTI business support products.

Complete the establishment of the Council for

Graduate Entrepreneurship by May 2004.

The Council was launched on 13 September 2004and is up and running. Three short research studieshave completed, the findings of which will be usedto develop the Council’s business plan. Workingwith the RDAs, design of their Flying Startprogramme aimed at encouraging more graduatesto start a business, has been completed.

Deliver a national enterprise awareness event

involving public and private sector partners in

November 2004.

The first national ‘Enterprise Week‘ was held from15-21 November 2004. Over 1,100 events tookplace across the country, organised by more than420 organisations. There was good media coverageof the Week with all but one of the national dailiescontaining articles about enterprise week and over900 items in regional newspapers. Media commentwas positive and there was strong centralgovernment commitment.

SBS performance against targets for 2004/05Figure 16.2:


151

Monitor, evaluate and drive forward

implementation of the government-wide Action

Plan for Small Business published in January

2004, updating the web-based implementation

programme available at www.sbs.gov.uk on a

regular basis.

Significant progress has been made withimplementing the actions set out in theGovernment Action Plan. Progress has beenassessed and updated on a quarterly basis on theSBS’s www.sbs.gov.uk website.

Complete a public consultation so that

government can consider whether to extend the

concept of common commencement dates for

regulations to new areas of domestic law, and

publish the responses.

Consultation was completed on 3 September 2004.81% of businesses were in favour of the adoptionof common commencement dates. A summary ofthe public responses was published in December2004 and is available on the SBS website:www.sbs.gov.uk.

The Chancellor of the Exchequer announced in thePre Budget Report on 2 December 2004 thatGovernment would extend commoncommencement dates to other areas of domesticlaw that impact on business, starting in 2005 withhealth and safety, company and consumer law, andwork and pensions law. Other areas will beincluded when it is feasible to do so.

Plan the transfer of responsibility for the

management of BLO contracts to the RDAs

within a national framework which maintains

core service standards with effect from April

2005.

Joint SBS/RDA Strategy Board set up to managethe transfer, and implementation of new BusinessLink business and brand model, with effect from1 April 2005.

Launch the second round of the City Growth

Strategies and Phoenix Fund Building on the

Best projects from April 2004, monitor their

progress and begin a programme of events to

share best practice by February 2005.

26 Building on the Best projects announced in April2004. Six pilot initiatives with housing associationsannounced in May 2004 and two more in place inSeptember 2004.

13 “enterprise for people with mental healthissues” projects launched in November 2004.

Launch of Phase 2 of City Growth in April 2004with 10 new areas in 6 Regions.

Phoenix Bursary Fund announced in April 2004.

Events to share best practice: May (all projects);October (Offenders); both with associatedpublications; widely disseminated.

Complete an action plan for carrying forward

the recommendations of the review of the

Small Firms Loan Guarantee by December 2004,

and launch a pathfinder round of Enterprise

Capital Funds within one month of State Aid

approval being received.

SFLG.

Key elements of implementation project identifiedand discussed with lenders November 2004. Moredetailed scoping and timetabling of those elementsfinalised for presentation of full plan to HMT inJanuary 2005. Externally recruited project managerrecruited November 2004.

Enterprise Capital Funds

European Commission scrutiny procedure nowunderway for ECF State Aid clearance. Lobbyingproduced a good level of support from industry andother Member States. Pathfinder launch delayed toSpring 2005 (subject to EC approval)

Companies House

16.3 Companies House is continuing toimprove the service it provides itscustomers through developing newproducts and improving theperformance of existing ones. A largeamount of this work is ensuring that itsservices are e enabled.

16.4 Currently 95% of all company searchesare fulfilled electronically, over 70% ofall new companies are formedelectronically and 67% of informationcan now be filed electronically. Howeverthe focus is now on educatingcustomers about these services andpromoting their take up.


152

Target 2002/03 2003/04 2004/05

100% of visitors seen within 10 minutes of agreed appointment time. 100% 100% 100%

100% of correspondence answered within 15 working days of receipt. 90% 100% 100%

Service First PerformanceFigure 16.3:


Provision

Administration costs 19.4 18.9 12.0 11.0 11.0

Programme4 121.8 166.0 166.8 169.6 169.5

Capital 19.6 34.6 17.0 52.0 61.0

SBS financial performance (£ million) Figure 16.4:

4 Figures exclude expenditure on Business Link Organisations and Smart R&D which transferred to the RDA single pot from 1 April 2005.


153

2001/02 2002/03 2003/04 2004/05Estimate

Take up for electronic submission of documents Target New New New 15%by end March Outturn 2004/05 2004/05 2004/05 11%

Combined Compliance rate for Accounts and Target New New New 92%Annual returns Outturn 2004/05 2004/05 2004/05 92%

Compliance rate for accounts submitted Target 95% 95% 95% Dis-Outturn 95% 96% 96% continued

Data capture accuracy Target 96% 96% 96.5% 96.5%Outturn 96% 96% 95.1% 97%

Image Quality – legibility and completeness Target New 98% 98% 98%Outturn 2002/03 94% 97% 99%

Image available on image system within Target New New New 99%three days Outturn 2004/05 2004/05 2004/05 99%

Web filing service availability Target New New New 98%(Mon-Fri 7am – 8pm) Outturn 2004/05 2004/05 2004/05 99%

WebCheck and CHDirect availability Target 98% 98% 98% 98%(Mon-Fri 7am – 8pm) Outturn 98% 98% 98% 99%

Reply to all Chief Executive cases from MP’s Target 100% 100% 100% 100%within ten days of receipt Outturn 100% 100% 100% 98%

Resolve complaints within target period Target 90% 96% 97% 97%Outturn 96% 98% 97% 98%

Customer satisfaction (quarterly) Target 75% >80% >80% >82%Outturn 82% 80% 85% 86%

Payment of bills in 30 days or agreed terms Target 100% 100% 100% 100%Outturn 99.6% 99.6% 100% 100%

Reduce real unit cost of processing/document Target 3% 3% 3% 3%registration (compared with previous year) Outturn 4% 3% 4.9% 3%

Achieve taking one year with another, an Target 6% 6% 6% 3.5%average annual rate of return (= operating Outturn 9% 9% 9% 3.5%surplus/average net assets x 100%)

Companies House Performance Against TargetsFigure 16.5:

2003/04 2004/05 2005/06 2006/07 2007/08outturn estimate plans plans plans

Income 52.9 59.0 69.8 67.6 64.5

Expenditure5 50.8 56.6 64.5 67.0 64.0

Surplus 2.1 2.4 5.3 0.6 0.5

Companies House financial performance (£ million) Figure 16.6:

5 Expenditure has been adjusted to take account of net interest payable/receivable and also the dividend on Public Dividend Capital.

The Patent Office

16.5 The Patent Office is a Trading Fund andas such its expenditure does not featureon the Department’s Request forResources. It is required to service itsdebt and pay a dividend, and its annualadministration costs are entirely coveredby fee income. The Patent Office isworking to an efficiency target ofincreasing output relative to expenditureby 2% per year. The Office is alsoworking towards challenging customerservice standards and demandingMinisterial targets.


154

2001/02 2002/03 2003/04 2004/05Estimate

To pay bills within 30 days of receipt of goods Target 100% 100% 100% 100%or services or a valid invoice, whichever is Actual 98.4% 98.8% 98.6% 99.47%6

the later

To reply within ten working days to all MPs’ Target 100% 100% 100% 100%letters delegated to the Chief Executive Actual 100% 100% 100% 100%6

To increase output in relation to current Target 2.0% 2.0% 2.0% 2.0% expenditure by an average of at least 2% per Actual 1.7% 4.00% 2.6%7 1.4%6, 7

annum over the period 1998/99 to 2002/03

In addition to those listed above the following new Patent Office targets have been introduced: 2002/03 2003/04 2004/05

Estimate

To increase performance year on year so that Target 90% 75% Discontinued90% of search reports are issued within six Actual 69.64% 86.79%months of request by 2005/06

To be issuing 90% of search reports within five Target n/a n/a 90%months of request by the end of the year. Actual 80.24%6

To grant 90% of patents within three years Target 90% 90% 90%of request Actual 89% 91% 96%6

To register 90% of correctly filed design Target 90% 90% 90%applications, to which no substantive objections Actual 95.5% 97.5% 99.5%6

have been raised, within three months of the date of application

To register 90% of processed trade mark class Target 90% Discontinuedapplications, to which no substantive objections Actual 98.5%are raised or oppositions filed within nine months of application

To reduce to an average of 39 weeks the time Target 100% Discontinuedtaken to issue a decision in trade marks inter Actual 100%partes cases once the case is ready (29 wks)

Patent Office performance against targetsFigure 16.7:


155

2002/03 2003/04 2004/05Estimate

To reduce to an average of 26 weeks the time Target n/a 100% 100%taken to issue a decision in trade marks inter Actual 100% 100%partes cases once the case is ready 26 weeks 27 weeks6

To publish details of progress towards key Target 100% 100% 100%milestones in the UK and International policy Actual 100% 100% 100%6

development in the Annual Report and on our website

Establish a baseline and metrics for IP Target n/a n/a 100%awareness and a target for 2005/06. Actual To be determined

at year end


Income 50.6 54.3 55.8 54.4 56.4

Expenditure8 43.8 43.9 49.1 52.2 54.5

Surplus 6.8 10.4 6.7 2.2 1.9

Patent Office financial performance (£ million) Figure 16.8:

The National Weights andMeasures Laboratory

16.6 The National Weights and MeasuresLaboratory (NWML) operates under anet running cost regime. It is free toincrease expenditure in line withworkload provided that this is recoveredby receipts. In 2003/04 NWML met sixof its eleven targets. Failure to meet allof the targets was principally due to amajor flood of the Laboratories in March2004. The current set of targetsprovides a balance of financial,efficiency and customer focusedtargets.

16.7 Each planning cycle NWML considershow targets can be tightened and whatnew targets might be appropriate. As aconsequence of a reduction of revenuefrom the DTI Legal MetrologyProgramme and other operational areasNWML embarked on a strategy ofdeveloping new business streams.This has proved to be too much of achallenge and NWML are currentlyworking on a new strategic plan thatconcentrates effort on core activitiesand organic growth. The way forwardwill be decided when the results of astrategic review are reported toMinisters in the near future.

6 Outturn as at 31 December 20047 This target, previously based on the average results for a five year period, was changed from 2003/04 to cover the average results for a rolling

three-year period.8 Note: Expenditure is net of interest receivable, and surplus is profit before interest payable and dividend


156

Target 2001/02 2002/03 2003/04 2004/05Estimate

To break even in the I&E account. From 2003/04 Target 0 -310 -35 105changed to a three year cumulative surplus of Actual 85 -90 -56 62£42k from 2003/04 to 2005/06 (£000s)

To meet the net RfR target Target 170 Dis- – –Actual 100 continued

Ensure that total overhead costs are less than Target (x) 55.0% 58.0% 55% 55%x% of total costs Actual 54.4% 56.3% 59% 59%

Completion of x% calibration jobs within y Target (x) 95.0% 95.0% 95.0% 95%working days and an average completion Actual 96.2% 97.3% 95.8% 92%of less than z days Target (z) N/A 14 14 14

Actual N/A 10 9.6 10Number of days (y) 189 18 18 18

Completion of x% European type Target (x) 95% 95% 100% 100%approvals jobs in y weeks. Actual 100% 97% 100% 100%From 2003/04 this has been Number of weeks (y) 10 10 10 10extended to all type approval jobs.

Achieve an average completion time of x Target (x) 6 6 5 5weeks or better for European type approvals Actual 4.4 2.9 2.6 3.0

Achieve an average completion time Target (x) N/A N/A 7 7of x weeks or better for UK type approvals Actual 3.6 4.0

To meet x% milestones by their due date Target (x) 70% 72%10 80% 80%in the work programme agreed between Actual 75.8% 80% 79% 82%the NMSPU11 and NWML

Achieve a customer rating of x% Target (x) 95% 95%12 95% 95%or more for NWML’s provision of services Actual 95% 95.9% 98.9% 98%

To increase non-DTI income by x% Target (x) 7.5% Dis- – –Actual -16% continued

In respect of approved verification to Target N/A N/A 95% 80%complete the evaluation of the application Actual 50% 100%and supporting documentation within 30 days of receipt for at least X% of applications

NWML performance against targetsFigure 16.9:


Income 3.2 3.3 3.4 3.5 3.4

Expenditure 3.3 3.3 3.3 3.4 3.4

Net cost of operations -0.1 0 0.1 0.1 0.0

NWML financial performance (£ million)Figure 16.10:

9 Target extended to include average completion time of 14 days10 Target refers to those scheduled for year one11 National Measurement System Policy Unit12 Target tightened to reflect achievement in previous year

The Insolvency Service

16.8 The Insolvency Service operates under anet control regime but is funded by theDepartment in respect of its work oninvestigation and enforcement and thedevelopment of insolvency policy.

The key issues for The Service are theimplementation of the insolvencyreforms contained in The Enterprise Act2002 that were put in place in 2004.These reforms included the move to anet controlled regime from 2004.


157

2001/02 2002/03 2003/04 2004/05Estimate

Hold initial meeting of creditors within Target 97.0% 97.0% Discontinued Discontinued12 weeks Outturn 96.8% 97.3% Discontinued Discontinued

Report to creditors on assets and Target 98.0% 98.0% Discontinued Discontinuedliabilities within eight weeks Outturn 97.9% 98.4% Discontinued Discontinued

Complete Case Administrations Target 26,000 28,500 26,000 DiscontinuedOutturn 26,395 30,328 28,907 Discontinued

Number of prosecution reports Target 1,110 1,174 N/a Discontinuedsubmitted where there is evidence of Outturn 1,174 1,097 946 Discontinuedcriminal behaviour

Number of proceedings brought in the Target 1,456 1,575 N/a Discontinuedpublic interest for the disqualification of Outturn 1,575 1,775 1,474 Discontinueddirectors of failed companies

Maintain the unit cost of case Achievement -7.2% 2 Year -6.2% Discontinuedadministration at 0% in real terms Targetover the period 1999-200213

Contain the unit cost of case Achievement N/a 2 Year -6.2% Discontinuedadministration at +1%14 Target

Reduce the unit cost of investigation Achievement 21.0% N/a N/a Discontinuedby 10% in real terms over the period 1999-2002

Contain the unit cost of investigating Achievement N/a 2 Year +3.9% Discontinuedcases at +10%14 Target

Percentage of user satisfaction as Target New New 86% 88%measured by the USI Outturn 87.9% 87%

The average time of concluding Target New New 24 22Disqualification proceedings months Outturn 22.4 25

Percentage of disqualification cases concluded in: 30 months – 86% Achievement New New 80.8% Discontinued

24 months – 60% Achievement New New 54.4% Discontinued

Action invoices for payment30 days – 100% Achievement New New 99.1% 99%20 days – 97% 95.8% 95%

Action Insolvency Service Account Achievement New New 97.4% 98%payments within 4 days – 98%

Action redundancy payment Target 80% 80% 82% 90%claims within 6 weeks Outturn 86% 86% 89%

Insolvency Service performance against targetsFigure 16.11:

13 The increase in unit cost is attributable to additional running costs of the new IT infrastructure over the original capital purchase projection; anaccelerated IT training programme; start up costs for the insolvency qualification and an increase in overhead attributable to case administration as aresult of larger than projected reductions in investigation unit cost.

14 These increases reflect plans by The Service to invest in information technology and staff resources to prepare for the Enterprise Bill. Thisinvestment is expected to lead to a net reduction in unit costs over a five year period.


158

2001/02 2002/03 2003/04 2004/05Estimate

Maintain the level of open Achievement New New New 90%insolvency cases at < 12 months input

Reduce the case administration Achievement New New New 2 Year fee by 1 April 2006 from that of Target1 April 2004 on a like for like basis by 8.5%

Increase manpower productivity Achievement New New New 11%of processing redundancy payment claims by 11%

Reduce the cost of Policy work Achievement New New New 9%by 9%

Reduce the cost of enforcement Achievement New New New 13%activity by 4%

Establish a new benchmark unit Achievement New New New 2 Year cost for post Enterprise Act Targetenforcement activity in 2004/05 and then reduce that cost by March 2006 by 25%

Increase enforcement activity Achievement New New New 2 Year outputs in 2005/06 over the Target2004/05 baseline by 41%

Retain accreditation from Achievement New New New AchievedCharter Mark – summer 2004 Achievement New New New 2 Year Investors in People January 2006 Target

Reduce the costs of the Achievement New New New 2 Year accommodation and procurement Targetfunctions by 8% over two years

2003/04 2004/05 2005/06 2006/07outturn Working plans16 plans16

Provision16

Income15 60.8 70.8 73.7 78.2

Administration Costs15 69.3 1.6 2.1 2.2

Programme15 16.4 100.8 112.3 116.8

Net Funding n/a 30.0 38.6 38.6

Insolvency Service Financial Performance (£ million)Figure 16.12:

15 Workload is estimated at 40,800 in 0405, 44,950 in 0506 and 49,510 in 0607.16 From April 2004 the Service moved onto a net controlled regime where income is used to cover the costs of expenditure on administration of

insolvencies (reclassified as programme). The DTI will continue to fund the costs of disqualification work from programme and policy work fromadministration.

2003/04 2004/05 2005/06 2006/07Outturn Working Estimate Estimate

Provision

Payments 253.0 216.0 235.0 255.0

Receipts 24.0 26.0 26.0 26.0

Redundancy PaymentsFigure 16.13:

The Employment TribunalsService

16.9 The Employment Tribunals Service (ETS)is a gross cost controlled Agency. Thenumber of applications made to

Employment Tribunals remains high andcases are increasing in complexity.Nevertheless, user satisfaction with thequality of service provided has remainedvery high for the last four years.


159

Performance against Key Targets 2001/02 2002/03 2003/04 2004/05

Registered Employment Tribunal applications 112,227 98,683 115,042 102,450

Registered appeals to the Employment Appeal Tribunal 1,432 1,170 1,235 1,000

Percentage of single Employment Tribunal cases Target 75% 75% 75% 75%to a first hearing within 26 weeks of receipt Actual 69% 74% 81% [81%]

Minimum to be achieved by all offices in relation Target 65% 65% 65% 65%to above target Actual 47% 45% 68% [71%]

Percentage of Employment Tribunal decisions Target 85% 85% 85% 85%issued within four weeks of the final hearing Actual 83% 86% 86% [91%]

Percentage of Employment Tribunal users Target 85% 85% 85% 85%satisfied with the service offered by ETS Actual 95% 95% 97% [95%]

Percentage of appeals to EAT registered for Target 90% 90% New target –a preliminary hearing ready for listing within Actual 94% 92% introducedsix weeks

Percentage of appeals to EAT to a first hearing Target – – 75% New targetwithin 39 weeks of receipt Actual – – 97% introduced

Percentage of appeals to EAT to a first hearing Target – – 75% 75%within 26 weeks of receipt Actual – – 93% [94%]

Real terms reduction in Employment Target 5% 3% 3% 3%Tribunal administrative unit costs Actual -11% -8% -7% [0%]

ETS Performance Against TargetsFigure 16.14:

2002-03 2003-04

Unfair dismissal 26% 23%

Unauthorised deductions 23% 22%

Sex, race and equal pay17 14% 16%

Other 37% 39%

Employment Tribunal Applications by JurisdictionFigure 16.15:


Provision

Admin Costs 27.3 27.7 27.9 27.3 26.3

Programme Costs 42.9 42.3 44.9 40.5 40.5

Capital 1.0 3.4 5.6 1.5 1.4

ETS Financial Performance (£ million)Figure 16.16:

17 This jurisdiction includes disability

160

Section C

ManagingtheDepartment

17 Managing The Department

Introduction

17.1 Delivering the Department’s Strategyrequires a high-performance workplacewith a strong focus on delivery. Toachieve this, the DTI is committed totransforming and continuouslyimproving its internal processes andservices so that they effectively andefficiently meet the needs of theirinternal customers and support thedelivery of the Department’s strategicobjectives and priorities.

Setting and DeliveringPriorities

17.2 The DTI Strategy1 published inSeptember 2003 continues to providethe overarching framework for how theDepartment will deliver its ambition ofProsperity for All. Built on a soundevidence base, the Strategy identifies aset of priorities that focus on raisingproductivity in the economy as a wholeand addresses areas where DTI canhave the greatest impact.

17.3 Building on the Strategy, the DTI’s FiveYear Programme2 published inNovember 2004 reaffirms theDepartment’s strategic priorities and

sets out how the UK will develop astrong, modern, knowledge basedeconomy which can meet thechallenges posed by rapidly emergingeconomies and new technologies.

17.4 The Business Plan 2005-083 translatesthe strategic priorities, principles andactions in the Strategy and Five YearProgramme into detailed action plans.Performance against these plans ismonitored quarterly by the PerformanceMonitoring Committee and theExecutive Board, both of which includeindependent members.

17.5 During 2004/05, the DTI has:

▼ Applied the priorities and principles inthe Strategy in delivering the objectivesin its Business Plan and in its approachto the 2004 Spending Review4;

▼ Continued to build and refine itsframework for developing the BusinessPlan and managing its delivery, includingstrengthening engagement with theregions at key stages of the planningand delivery cycle;

▼ Continued to strengthen its analyticalcapabilities and evidence base, includingfrom evaluation and appraisal, and

161

Chapter 17

Managing the DepartmentIntroduction

Setting and Delivering Priorities

Corporate Communications

Excellent Corporate Services

Delivering EfficiencyLeadershipPeople and Skills

Excellent Legal Services

1 Full text at www.dti.gov.uk/about/strategy2003.html 2 Full text at www.dti.gov.uk/fiveyearprogramme.html3 www.dti.gov.uk/about/dti-businessplan-2004-08.pdf. Summaries of delivery plans can be found at www.dti.gov.uk/about/dti-businessplan-2004-08-

summary.pdf4 Further detail at www.hm-treasury.gov.uk/spending_review/spend_sr04/spend_sr04_index.cfm

ensured they are effectively used toinform and support strategic andoperational decision making;

▼ Further embedded project-working inDTI policy and delivery activities; and

▼ Overhauled and streamlined itscorporate governance arrangements.

17.6 During 2005/06, the DTI will:

▼ Continue to apply the priorities andprinciples in the Strategy, and theactions in the Five Year Programme, toits Business Plan objectives, and to itsapproach to the 2006 Spending Review;

▼ Continue to build and refine an effectiveand streamlined framework fordeveloping the Business Plan andmanaging performance against itenabling the DTI to deliver its prioritiesand essential services;

▼ Continue to ensure the Department hasa robust and comprehensive evidencebase to underpin and drive the designand delivery of strategic policy;

▼ Strengthen the streamlined corporategovernance arrangements, whichprovide for effective decision makingwith strong independent involvement;and

▼ Improve the Department’s effectivenessin delivering project outcomes throughbetter allocation of resources to keyprojects.

Corporate Communications

17.7 Building effective corporatecommunications and stakeholderrelations continues to be a major priorityfor the Department. They are thefoundations of strong reputation, whichis necessary to ensure the Departmentis able to explain and promote itsmessages and policies and buildeffective working relationships andinfluence with stakeholders.

17.8 During 2004/05, the DTI has:

▼ Introduced a new Content ManagementSystem to run its website,www.dti.gov.uk. This is now being


162

7 DTI excluding executive agencies

Correspondence and appointments

Dealing with enquiries is an important aspect of the Department’s relationship with itscustomers. Information on DTI’s performance in handling correspondence and keepingappointments is below:

2002/03 2003/04

Letters answered or receiving a holding reply within 15 working days(a) 97% 97.5%

MPs’ letters answered within 15 working days 58% 72%

MPs’ letters to Agency Chief Executives answered within ten working days 85% 100%

Visitors seen within ten minutes of appointment time at our office7 98.9% 98.9%

Service First PerformanceFigure 17.1:

rolled out across the Department and ishelping to improve the way DTI usesthe Web. The branding of DTI’s webactivities has been progressivelystrengthened over the year, in order togive the Department’s efforts morefocus and make it easier for ourcustomers to access our informationand services;

▼ Further improved internal mechanismsfor briefing, communications andfeedback, including improvements tothe Department’s internal publicationDTI News following a Departmentalreview. Changes have also been madeto the Department’s intranet andgeneral e-communications with all staff;

▼ Undertaken system and qualityupgrades to briefing@dti to providemore accurate and timely briefing on allDTI activities;

▼ Co-ordinated marketing strategies moreeffectively, maximising the coherenceand cost effectiveness ofcommunications expenditure, includingby programme budget holders. Toachieve this DTI has introduced a newapproach to planning and implementingmarketing plans, reorganising itsmarketing specialists centrally andacross the Department to ensuregreater coordination and costeffectiveness and is strengthening andmodernising its procurement methods;and

Managing the Department

163

5 Full text at www.dti.gov.uk/efficiency_technicalnote.html

Expenditure on marketing communications

Programme budget holders are responsible for expenditure on advertising and othermarketing communications, alongside other items of spending in support of their objectives.In exercising this responsibility, they are advised on the most effective publicity andpresentation options by central publicity and media specialists or by local teams of adviserswith the necessary skills and experience. The principal focus of marketing activity in 2004/05was on employment relations, with £2.03m spent on campaigns to publicise new laws forresolving disputes in the workplace, changes in the national minimum wage and newregulations on informing and consulting employees. Regional marketing to publicise the firstfour Consumer Direct helpline pathfinder projects cost £1.3m and marketing expenditure byDTI to raise awareness of the benefits of renewable energy was £0.71m. A £0.64mmarketing campaign aimed to minimise the number of injuries caused by fireworks andinform firework users and retailers of a strengthening of the law to reduce fireworks misuse,noise and nuisance was run in the autumn. In addition there was a centrally held budget of£1.9m for publicity spending in 2004/05. The budget was used to fund the publicityrequirements of the Queen’s Awards Office, corporate DTI presentations and regional mediarelations activities, and internal communications.

Private Sector sponsorship of Departmental activities

DTI continues to follow strictly the recommendations of the Committee on Standards inPublic Life and Cabinet Office guidelines in handling any sponsorship arrangements with theprivate sector. Central advice is available to policy directorates and Agencies where required.

In 2004/05 DTI had no significant (i.e. more than £5,000) commercial sponsorship in cash orin kind.

▼ Developed and implemented a series ofprogrammes to strengthen the DTI’srelationships with stakeholders acrossWhitehall and in the EU on key policyissues which have an impact on theDepartment’s priorities and objectives.

17.9 During 2005/06, the DTI will continueto work to improve awareness andunderstanding of its vision, objectivesand policies and the cost-effectivenessof its communications, as well as toforge stronger partnerships with keystakeholders including otherGovernment Departments. TheDepartment’s plans include:

▼ Enhancing its credibility throughexcellent external communications –specifically the provision of high qualityand timely service, information andadvice;

▼ Raising staff awareness andunderstanding of key corporatemessages;

▼ Developing a strategic approach tomarketing;

▼ Ensuring that Corporate Stakeholdersare satisfied with the level of contactand quality of dialogue and understandthe rationale for DTI decisions andactions; and

▼ Restructuring MarketingCommunications so that it supportsbetter planning and greater centralcontrol of marketing activity, allowingsavings to be identified.

Excellent Corporate Services

17.10 The Department’s Services Group,working closely with the Strategy Unit,takes the lead in setting corporatestrategies in areas such as humanresources, accommodation, informationand financial management, providing theinternal services and infrastructure forthe DTI’s Headquarters operations and,

where appropriate, its agencies. Overthe last year Services Group and theStrategy Unit have been developing abusiness model for the DTI toeffectively and efficiently deliver the DTIstrategy, driving up the quality of theDepartment’s leadership, people andskills, guided by the delivery principlesestablished in the DTI Strategy:customer focus, value for money andcontinuous improvement.

Delivering Efficiency

17.11 DTI’s five-year strategy and BusinessPlan set out how we will strengthen ourfocus on delivery and provide value formoney. An Efficiency Programme hasdeveloped a new business model forthe Department to enable us to deliverthe DTI Strategy efficiently andeffectively. Our vision is of a smaller,simpler and more responsive coreDepartment focused on its nationalpolicy making and influencing role. DTIservices to customers will be deliveredby contractors, partners or agenciesfrom regional locations.

17.12 During 2004/05 the DTI has:

▼ Introduced more flexible use of spaceand new ways of working in the mainHQ building to achieve an occupancy rateof eight desks for ten staff and takenforward its London property strategy,vacating accommodation in threebuildings by May 2005;

▼ Achieved its requirement from the 2004Spending Review to relocate 85 postsfrom Central London by 2007/08 (chieflythrough the relocation of its financeprocessing function from London toBillingham and HR posts moving toCardiff);

▼ Moved towards achieving headcounttargets by working more efficiently andeffectively in all areas, and stopping


164

some things and scaling down othersso that we have a sharper focus on theDepartment’s priorities;

▼ Published our Efficiency Technical Note5

setting out our plans to achieve theefficiency target agreed in the 2004Spending Review;

▼ Developed a more flexible, project-based approach to policy makingthrough the introduction of the ProjectPool (PPP). The PP brings together acore team of policy development staffwho will work on priority projects acrossthe Department delivering moreefficient project working; and

▼ Rationalised the policy support functionthrough the implementation of theResponse Centre (RC). The RC receivesand responds to externalcorrespondence on behalf of theDepartment – with a target of handling80% of this correspondence withouthaving to refer to policy officials.

17.13 During 2005/06 the DTI will build onthis initial work and implement the mainefficiency delivery workstreams set outin its Efficiency Technical Note, managedas a comprehensive programme byDTI’s finance directorate. Our efficiencysavings have been reflected in theDepartment’s resource allocations foreach of the objectives in the BusinessPlan for the coming year and we willmonitor performance to ensure thatobjectives are delivered effectively andon budget. In particular DTI will:

▼ Deliver over £380 million of efficiencybenefits over the period 2005-08, atleast half of which will release funds forinvestment in priority programmes;

▼ Continue work to reduce staff numbersin DTI HQ by 1,010 by 2007/08, butdeploy people more flexibly in line withpriorities and based on effective projectmanagement;

▼ Continue to implement projects from itsEfficiency Programme including the PPPand RC. New projects include theDepartment’s ICT transformation projectto support new ways of working;

▼ Maintain and improve delivery of its PSAtargets and other key objectives, whileoperating within constant cash budgets,ensuring the same benefit to customersby working more flexibly and focusingon delivery;

▼ Reduce the amount of funding directedto old Business Support schemes andinstead concentrate activity on betterfocused Business Support products,using new productivity criteria to give abetter deal to customers;

▼ Improve the effectiveness of theScience and Engineering Base throughResearch Council activity achievingefficiency gains of £195m in the sciencebudget in 2007/08 through the ResearchCouncils re-directing funding into highpriority areas and the highest qualityproducts and researchers fully using thecapacity of capital;

▼ Launch the NDA, which will use its firstyear of activity to establish itself withthe longer term aim of reducing theUK’s civil nuclear liabilities by 10% by2010. The NDA will deliver at least 2%efficiency benefits from 2006/07,against its planned programme of work;

▼ Deliver more effective regionalregeneration and business developmentvia the RDAs leading to a number ofefficiency benefits, including, forexample, the RDAs achieving 2.5% perannum efficiency gains totalling £23million over 2005-08; and

▼ Aim to reduce the running costs of theDepartment’s agencies and Non-Departmental Public Bodies. Forexample, Companies House willstreamline company registration to


165

delivery efficiencies of £7.7 million over2005-08. Through reduced cost ofenforcement activity and increasedenforcement outcomes against reducedunit cost, the Insolvency Service willdeliver £5.89 million of efficiency gainsduring this period.

Leadership

17.14 Our aim is to have leaders who will leadby example, encouraging change andnew ways of working. They willprioritise work to ensure that ourcommitments to deliver are consistentwith the resources available.

17.15 During 2004/05, we:

▼ Introduced a more intensive leadershipprogramme for new members of ourSenior Civil Service (SCS);

▼ Rolled out leadership training anddevelopment opportunities for all staffincluding a programme of weeks inbusiness for senior staff;

▼ Encouraged secondments to and fromexternal organisations; and

▼ Worked to embed an ImprovingLeadership Capacity Initiative toenhance career development,strengthen performance managementand time limit SCS posting to four years.

17.16 During 2005/06 we plan to strengthenour leadership capacity by:

▼ Extending our investment in leadershipdevelopment to those just below SCSlevel; and

▼ Making leadership and managementskills a key consideration in selection forpromotion to management roles.

People and Skills

17.17 Our Five Year Programme describes anew DTI that is smarter and moreflexible. During 2004/05, we have beenworking towards a leaner and morehighly skilled Department. To this endwe have:

▼ Ensured that people affected byrestructuring received a range ofpractical support to help them findalternative posts;

▼ Provided opportunities for developmentin those areas identified as keyDepartmental priorities. These includebusiness credibility, economics for non-economists, better policymaking andproject management. In total approx660 training interventions have takenplace; and

▼ Significantly improved theprofessionalism of those undertakingsupport functions such as humanresources, finance, and ICT. We haveachieved this through a combination ofinternal upskilling, and externalrecruitment.

17.18 We have continued to:

▼ Implement our three year diversitystrategic plan and disability at workstrategy, including diversity proofing anumber of new initiatives, at the sametime increasing awareness of EUlegislation on sexual orientation andreligion; and

▼ Support, coach and advise ourmanagers on effective performancemanagement.


166

Days lost through sickness absence

Target by 2004: 7.2 days lost per person

Performance in 2003: 7.2 days lost per person

17.19 During 2005/06 the Department willwork towards the vision of astreamlined, high performingDepartment that people want to joinand be a part of by:

▼ Increasing the amount we spend ontraining (per person) to give our staff theskills needed to flourish in the new DTI;

▼ Developing new skills and careerpathways through the Professional Skillsfor Government agenda, providing

development opportunities to gainpolicy, devliery and corporate servicesexpertise;

▼ Recognising the skills and supportingthe training programmes and careeraspirations of our specialists;

▼ Placing priority on increasing thecapabilities of our managers;


167

Diversity in Public Appointments6

Targets

Women to account for 45-55% of DTI public appointments made during each of 2005, 2006and 2007.

People from minority ethnic origin to account for 8.5% of DTI public appointments madeduring each of 2005, 2006 and 2007.

Disabled people to account for 5% of DTI public appointments made during each of 2005,2006 and 2007.

2002 2003 2004

Total number of appointments 2,951 3,106 2,998Of which:

Women 906 1,011 1,006 (30.7%) (32.5%) (33.6%)

Minority ethnic origin 217 217 191(7.4%) (7%) (6.4%)

Disabled 129 135 165(4.4%) (4.3%) (5.5%)

Diversity in the Senior Civil Service (SCS)

The Department’s performance against Cabinet Office targets for the diversity of the SCS issummarised below:

Target Performance

(by 2004/05) (March 2005)

SCS who are women 35 % 32 %Top SCS posts occupied by women 25 % 31 %SCS from ethnic minority backgrounds 3.2 % 3.1 %SCS with disabilities 3 % 4.5 %

▼ Increasing the number of peoplebenefiting from working flexible hoursin flexible, fit for purpose workingconditions and with better ICT;

▼ Foster a culture of continuousperformance improvement with fair andtransparent performance assessmentand pay and non-pay rewardmechanisms to recognise highperformance. Poor performers willreceive help to continue to improveand persistent poor performers will betackled fairly but seriously; and

▼ Developing changes to age andchildcare policy.

Excellent Legal Services

17.20 The Department has been very wellsupported by its Legal Services Group,responsible for providing Ministers,officials and DTI agencies with thehighest quality legal services across thefull range of DTI activities. LegalServices lead on the preparation oflegislation, investigating and, whereappropriate, prosecuting criminaloffences, co-ordinating the DTI’slegislative programme, contributing toEU negotiations, as well as to thedevelopment of internationalcommercial and private international lawmaking, and providing advice on legalpolicy. As part of its commitment todelivering excellent legal services, theGroup takes regular soundings fromclients and stakeholders on itsperformance, including an annualsurvey. The last survey showed 99%of clients were either satisfied or verysatisfied.

17.21Through its Legislative Board, the Groupleads on the prioritisation of theDepartment’s legislative programme,co-ordinates the preparation oflegislation, monitors the progress ofBills during the preparatory stages and

educates the Department generallyabout Bills and Statutory Instruments.The Department’s policies were wellrepresented in the Government’s2004/05 legislative programme and theDTI’s Legal Team successfully met thechallenges of an exceptionally busyyear, including:

▼ The Civil Partnership Act, whichestablishes a civil registration schemefor same sex partners, providing a newlegal status and a package of rights andresponsibilities (see also Chapter 10 ‘Maximising Potential in the Workplace’);

▼ The Employment Relations Act buildson the success of the EmploymentRelations Act 1999 by encouragingpartnership at work, throughinformation, consultation, improvementsto the statutory recognition procedure,strengthening protection for trade unionmembers and individuals exercisingtheir rights, and establishing funds tohelp unions to modernise (see alsoChapter 10 ‘ Maximising Potential in theWorkplace’);

▼ The Energy Act supports theGovernment’s commitment to asustainable energy policy for the futureby establishing a comprehensive legalframework to support renewable energydevelopments (see also Chapter 12‘Sustainability and the Environment’);

▼ The Companies (Audit, Investigation

and Community Enterprise) Act,which aims to improve confidence incompanies and financial reporting,strengthening the supervision ofauditing and powers to investigatealleged company malpractice. (See alsoChapter 11 ‘Corporate and InsolvencyActivity Framework’); and

▼ The Patents Act, which overhauls thePatents Act 1977 and also aligns the1977 Act with the revised version of theEuropean Patent Convention.


168

17.22Other legislation delivered by the Groupincluded Regulations for the protectionof the public, including those onFireworks and Cosmetics, RegulatoryReform Orders and Rules on Patentsand a Private Members Bill onChristmas Day Trading, on which theDepartment provided assistance to theBill sponsor.

17.23 Good progress was made on the majorCompany Law Reform Bill which aimsto modernise company law, primarily byimplementing the recommendations ofthe independent Company Law Review.A White Paper setting out proposals inall areas and draft clauses on many ofthem was published on 17 March 2005(see also Chapter 11 ‘Corporate andInsolvency Activity Framework’).

17.24 The Whitehall Prosecutors Group, whichis chaired by DTI, plays a leading role inco-ordinating the efforts of centralgovernment prosecuting authorities.This year in particular, it helped theseauthorities give a joined up response tothe challenges of FOI.

17.25The value of the DTI Legislative Board,chaired by the Solicitor and DirectorGeneral Legal Services, in co-ordinating,prioritising, and monitoring the progressof Bills in the preparatory stages wasevidenced by other GovernmentDepartments’ decisions to set up theirown, similar, Boards.


169

6 Delivering Diversity in Public Appointments 2004, Cabinet Office, December 2004,www.publicappointments.gov.uk/publications/diversityreport04.pdf

170

A1 Total Public Spending

A2 Resource Budget

A3 Capital Budget

A4 Capital Employed

A5 Administration Costs

A6 Staff Numbers

A7 Total Spend by Country/Region

A8 Total Spend per Headby Country/Region

A9 Spend on Function/Programme by Country/Region

Annex A

Core tables

171

Annex A1

Total Public Spending

Annex A: Core Tables

£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Outturn Outturn Outturn Outturn Outturn Estimated Plans Plans Plans

Outturn

Consumption of resources:

Increasing UK Competitiveness 2,926 4,889 4,540 4,966 2,859 2,528 2,895 3,004 3,075Increasing Scientific Excellence 1,523 1,618 1,832 1,995 2,196 2,436 2,743 2,729 2,730UKAEA Pension Funds 164 247 201 212 237 250 264 273 282Unallocated Provision – – – – – – 193 343 543

Total resource budget 4,614 6,754 6,573 7,173 5,292 5,214 6,095 6,348 6,630

of which:Resource DEL 3,892 5,932 5,384 3,949 4,230 5,109 5,768 6,124 6,288

Capital spending:

Increasing UK Competitiveness -46 -17 104 266 510 1,042 146 292 267Increasing Scientific Excellence 38 55 63 80 116 197 164 164 164Unallocated Provision – – – – – – 41 71 91

Total capital budget -8 38 166 346 626 1,239 351 527 522

of which:Capital DEL -8 38 166 346 576 239 301 477 472

Total public spending (1) 4,516 6,702 6,612 7,423 5,747 6,326 6,323 6,740 7,012

(1) Total public spending calculated as the total of the resource budget plus the capital budget, less depreciation

Spending by local authorities on functions relevant to the department

Current spending 213 216 233 248 278 284

of which:financed by grants from budgets, above 10 15 97 68 50 72

Capital spending 601 763 547 825 1,128 1,692

of which:financed by grants from budgets, above – 33 33 69 50 18

Total public spending for the Department of Trade and Industry Table 1

172

Annex A2

Resource Budget


£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08


Outturn

Non-science 2,926 4,889 4,540 4,966 2,859 2,528 2,895 3,004 3,075

of which:Knowledge Transfer and Innovation 166 136 147 173 29 140 354 274 319Extending Competitive Markets 48 44 31 71 106 77 92 88 88Security of Energy Supply 8 156 10 -1 9 27 6 5 5Sustainability and the Environment 57 69 97 25 22 57 99 69 69Enterprise Growth and Business

Investment 342 402 452 478 406 469 175 178 175Regional Economies 301 336 506 456 466 670 670 783 794Trade and Investment 28 27 31 32 35 36 37 34 33Maximising Potential in the Workplace 102 115 119 139 166 210 200 192 185Corporate Activity and Insolvency

Framework 169 196 237 313 254 254 275 297 311Assets and Liabilities 1,484 3,150 2,581 2,986 1,007 193 610 738 756Nuclear Security and Export Control 17 16 31 29 61 55 54 51 54Activities in Support of all Objectives 204 242 298 265 299 342 323 295 286

Science 1,523 1,618 1,832 1,995 2,196 2,436 2,743 2,729 2,730

of which:Expenditure of Research Councils 1,429 1,480 1,609 1,669 1,762 1,987 2,263 2,261 2,263Departmental Science programmes 94 138 223 325 434 448 480 468 468

UKAEA Pension Funds 164 247 201 212 237 250 264 273 282

of which:UKAEA Pension funds 164 247 201 212 237 250 264 273 282

Unallocated provision – – – – – – 193 343 543

of which:Increasing UK Competitiveness – – – – – – 4 28 33Increasing Scientific Excellence

in the UK – – – – – – 189 315 510

Total resource budget 4,614 6,754 6,573 7,173 5,292 5,214 6,094 6,346 6,628

Resource Budget for the Department of Trade and IndustryTable 2

173

Annex A3

Capital Budget


£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08


Outturn

Non-science -46 -17 104 266 510 1,042 146 292 267

of which:Knowledge Transfer and Innovation 7 4 19 13 25 23 5 5 5Extending Competitive Markets 8 16 15 21 64 1 -23 1 1Security of Energy Supply – – 4 1 – – – – –Sustainability and the Environment – – – 2 10 – – – –Enterprise Growth and Business

Investment -78 -76 16 142 338 -10 -141 -106 -97Regional Economies – 47 33 70 13 1 2 2 2Trade and Investment – – – – – – – – –Maximising Potential in the Workplace 2 3 1 3 4 4 3 3 3Corporate Activity and Insolvency

Framework – – – – -2 – – – –Assets and Liabilities 7 -4 3 11 45 1,002 300 387 353Nuclear Security and Export Control – – – – – – – – –Activities in Support of all Objectives 9 -8 12 4 13 21 2 2 2

Science 38 55 62 80 116 197 164 164 164

of which:Expenditure of Research Councils 37 55 62 80 116 197 164 164 164Departmental Science programmes – – – – – – – – –

UKAEA Superannuation Funds – – – – – – – – –

of which:

Unallocated provision – – – – – – 41 71 91

of which:Increasing UK Competitiveness – – – – – – – – –Increasing Scientific Excellence

in the UK – – – – – – 41 71 91

Total capital budget -8 38 166 346 626 1,239 351 527 522

Capital Budget for the Department of Trade and IndustryTable 3

174

Annex A4

Capital Employed


£ million 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Assets on balance sheet Outturn Outturn Outturn Outturn Forecast Projected Projected Projected

at end of year:

Fixed Assets

Tangible 112 133 146 147 160 166 171 177 of which:

Land & Buildings 73 91 101 121 133 149 156 163 Fixtures & Fittings 6 7 10 10 10 3 1 1 Equipment & IT 21 21 17 4 4 2 2 2 Assets under Construction 0 0 2 11 12 5 5 5 Other 11 14 16 1 1 6 6 6

Investments 3,739 4,386 3,572 4,031 4,117 4,271 4,376 4,461 Total Fixed Assets 3,851 4,519 3,718 4,178 4,277 4,437 4,547 4,638

Current Assets 3,132 3,155 2,011 2,290 1,843 1,652 1,453 1,346 Creditors <1 year -394 -1,218 -952 -882 -800 -701 -701 -701 Creditors >1 year -579 -893 -602 -601 -601 -601 -601 -601 Provisions -12,425 -12,094 -14,220 -18,917 -18,216 -17,936 -16,926 -15,395 Capital employed within

main department -6,416 -6,530 -10,045 -13,931 -13,497 -13,149 -12,228 -10,713

NDPB net assets 1,954 1,609 1,759 2,120 2,226 2,337 2,454 2,577

Total Capital employed in

departmental group -4,462 -4,921 -8,286 -11,811 -11,271 -10,812 -9,774 -8,136

Capital EmployedTable 4

175

Annex A5

Administration Costs


£ million 1999/2000 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Outturn Outturn Outturn Outturn Outturn Outturn Estimated Plans Plans

Outturn

Gross administration costs

Paybill 185 220 180 224 206 167 170 174 169Other 231 227 235 259 321 247 234 203 198Total gross administration costs 416 447 435 482 527 414 403 377 367

Related administration cost receipts -111 -109 -120 -131 -133 -16 -5 -14 -14

Total net administration costs 304 338 315 352 394 398 398 363 353

Analysis by Activity:Knowledge Transfer and Innovation 4 2 0 2 0 4 7 7 7Extending Competitive Markets 9 5 6 7 27 0 0 0 0Trade and Investment 28 27 31 32 35 36 37 34 33Maximising Potential in the Workplace 46 51 24 26 27 25 28 28 28Corporate Activity and Insolvency

Framework 6 11 15 15 3 2 2 2 2Activities in Support of all

(non-Science) Objectives 203 233 226 256 285 318 311 283 274Increasing Scientific Excellence 10 9 12 14 17 13 13 9 9

Total net administration costs 304 338 315 352 394 398 398 363 353

Administration CostsTable 5

176

Annex A6

Staff Numbers


2003-04 2004-05 2005-06 2006-07 2007-08

Actual Estimated Plans Plans Plans

Outturn

Department of Trade and Industry (DTI)2

(Gross Control Area)

CS FTEs3 3750.0 3803.0 3467.0 3397.0 3388.0Overtime 30.0 23.5 23.5 23.5 23.5Casuals4 25.0 44.0 30.0 30.0 30.0Non-permanent 431.0 333.0 166.0 120.0 120.0

Total 4236.0 4203.5 3686.5 3570.5 3561.5

Small Business Service



Total 373.0 325.0 252.0 201.0 201.0

UK Trade & Investment5



Total 779.6 740.0 628.0 575.0 575.0

Employment Tribunals Service


CS FTEs 710 7486 769 703 689Overtime 4 4 4 4 4Casuals 61 13 2 0 0

Total 775 765 775 707 693

The Insolvency Service7

(Net Control Area)8


Total 1625 1688 1911 2011 2011

National Weights and Measures Laboratory

(Net Control Area)


Total 52 51 50 49 48

Staff Numbers1Table 6

177


2003-04 2004-05 2005-06 2006-07 2007-08

Actual Estimated Plans Plans Plans

Outturn

Advisory, Concilliation and Arbitration Service



Total 925 909 909 866 816

Companies House

(Trading Fund)

CS FTEs 1148 1242 1252 1123 1016

Patent Office

(Trading Fund)

CS FTEs 1038 1003 995 995 979

TOTAL DTI 10951.6 10926.5 10458.5 10097.5 9900.5

1 All figures shown are an average taken across the financial year. With regard to the SR04 headcount reduction the DTI baseline is the 01 April 2004baseline and not the average workforce for the 2004/05 period.

2 The figures for DTI include staff working in core DTI, Office of Manpower Economics (OME) and Government Office staff working on DTI andSBS activities.

3 CS FTEs refers to FTE staff in permanent civil service posts.4 Casuals refers only to those temporary staff whose records are handled by the HR Operations pay and records team.5 UKTI’s commitment to DTI is to reduce by 200 posts over the SR04 period. The figures in the table above should be treated as indicative.6 30 agency staff are included in the permanent total for 2004/05 outturn. This is consistent with Employment Tribunals Service practice of including

agency staff who are filling permanent posts. The figures going forward exclude agency staff and are based on permanent posts that need to be filled.7 RPS staff transferred from DTI core to Insovlency Service from April 2003.8 Insolvency Service was a Gross Control Area until 2003/04 and then moved to Net Control for 2004/05 onwards.

178

Annex A7

Total Spend by Country/Region


£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Outturn Outturn Outturn Outturn Outturn Plans Plans Plans Plans

North East 135.5 146.6 189.9 203.2 340.2 377.3 385.6 399.4 423.8North West 714.0 765.0 811.8 755.3 707.8 779.7 917.3 968.3 942.1Yorkshire and Humberside 268.4 269.6 333.7 383.2 484.4 620.7 566.2 594.1 628.1East Midlands 207.8 212.8 243.8 274.1 270.9 308.1 299.8 317.0 322.9West Midlands 225.4 245.7 231.7 246.8 306.7 334.0 330.2 345.7 345.1South West 269.9 281.0 283.1 286.4 294.8 355.0 371.1 398.8 389.8Eastern 327.1 342.7 341.5 412.7 333.4 374.4 356.0 378.3 375.7London 443.3 463.2 433.5 484.9 608.0 706.8 708.1 749.1 746.2South East 434.9 470.0 463.3 616.6 579.5 727.6 853.6 940.1 906.6

Total England 3026.3 3196.6 3332.4 3663.2 3925.8 4583.7 4788.0 5090.8 5080.3

Scotland 319.8 367.6 395.8 406.2 480.5 535.0 825.0 922.1 881.6Wales 148.0 158.4 185.3 197.4 226.2 260.3 240.5 254.7 273.3Northern Ireland 41.9 41.7 33.1 36.5 43.8 45.2 41.2 47.1 47.0

Total UK identifiable expenditure 3536.0 3764.4 3946.5 4303.4 4676.2 5424.2 5894.7 6314.7 6282.2

Outside UK 207.3 208.2 220.9 239.1 294.9 259.1 264.9 262.1 262.2

Total identifiable expenditure 3743.3 3972.6 4167.4 4542.5 4971.1 5683.3 6159.6 6576.8 6544.4

Non-identifiable expenditure 731.0 773.0 832.0 912.0 1124.0 1295.4 1509.3 1503.6 1790.9

Total expenditure on services 4474.3 4745.6 4999.4 5454.5 6095.1 6978.7 7668.9 8080.4 8335.3

Department of Trade and Industry’s identifiable expenditure on services,

by country and region Table 7

£s per head 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Outturn Outturn Outturn Outturn Outturn Plans Plans Plans Plans

North East 53.1 57.7 74.7 80.1 134.0 148.8 152.3 157.9 167.7North West 105.4 112.9 119.9 111.3 104.0 114.5 134.5 141.8 137.7Yorkshire and Humberside 54.2 54.4 67.1 76.8 96.7 123.6 112.4 117.7 124.0East Midlands 50.0 51.1 58.2 64.9 63.7 72.1 69.8 73.4 74.4West Midlands 42.7 46.6 43.9 46.5 57.7 62.7 61.8 64.6 64.3South West 55.3 57.2 57.3 57.6 59.0 70.6 73.3 78.3 76.0Eastern 61.3 63.8 63.2 76.1 61.0 68.1 64.3 67.9 67.0London 62.0 64.0 59.2 65.8 82.3 95.1 94.7 99.6 98.6South East 54.7 58.8 57.7 76.7 71.7 89.6 104.5 114.5 109.8

Total England 61.7 64.9 67.4 73.8 78.7 91.6 95.2 100.8 100.2

Scotland 63.0 72.6 78.1 80.4 95.0 105.6 162.7 181.9 174.2Wales 51.0 54.5 63.7 67.5 77.0 88.1 81.0 85.5 91.5Northern Ireland 25.0 24.8 19.6 21.5 25.7 26.5 24.0 27.3 27.2

Total UK identifiable expenditure 60.3 63.9 66.8 72.5 78.5 90.7 98.2 104.8 103.9

Department of Trade and Industry’s identifiable expenditure on services, by

country and region, per headTable 8

Annex A8

Total Spend per Head byCountry/Region

179

Annex A9

Spend on Function/Programmeby Country/Region for 2003/04


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OUTSIDE UK

Total Identifiable expenditure

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Totals


181

Footnotes/Explanatory Text for Core Tables A7 to A9

● The spending data shown in these tables is consistent with the country and regionalanalyses (CRA) published by HM Treasury in Public Expenditure Statistical Analyses(PESA). PESA contains more tables analysed by country and region, and also explains howthe analysis was collected and the basis for allocating expenditure between countries andregions.

● The tables include the spending of the department and its NDPBs on payments to theprivate sector and subsidies to public corporations. They do not include capital finance topublic corporations but do include public corporations capital expenditure. They do notinclude payments to local authorities or local authorities own expenditure.

● The data are based on a subset of spending – identifiable expenditure on services – whichis capable of being analysed as being for the benefit of individual countries and regions.Expenditure that is incurred for the benefit of the UK as a whole is excluded.

● The tables do not include depreciation, cost of capital charges or movements in provisionsthat are in DEL/AME. They do include salaries, procurement expenditure, capitalexpenditure and grants and subsidies paid to individuals and private sector enterprises.

● The figures were taken from the HM Treasury Public Expenditure database in December2004 and the regional distributions were completed in January 2005. Therefore the tablesmay not show the latest position.

● Across government, most expenditure is not planned or allocated on a regional basis.Social security payments, for example, are paid to eligible individuals irrespective of wherethey live. Expenditure on other programmes is allocated by looking at how all the projectsacross the departments area of responsibility, usually England, compare. So the analysisshows the regional outcome of spending decisions that have on the whole not been madeprimarily on a regional basis.

● The functional categories used are the standard United Nations Classifications of theFunctions of Government (COFOG) categories. This is not the same as the strategicpriorities used elsewhere in the report.

182

B1 Resource Estimate Details

B2 Statement of Contingent orNominal Liabilities

B3 Research Councils’ Grant-in-Aid

B4 Research Councils Long TermProjects

B5 Non-Departmental PublicBodies

B6 Senior Civil Service Salaries

B7 DTI Public Appointments

Annex B

SupplementaryTables

183

Annex B1

Resource Estimate Tablesincluding Appropriations in Aid and Consolidated FundExtra Receipts

Annex B: Supplementary Tables

All in £000s

2003/04 2004/05 2005/06

Outturn Total provision

Provision

Spending in Departmental Expenditure Limits (DEL)

Central Government’s own expenditure:

Function A: Knowledge Transfer and Innovation

130,485 170,077 A1 Innovation in Support of Knowledge Transfer 296,997

41,677 33,057 (1) Space 32,957

8,561 22,157 Domestic Civil Space Technology 22,05733,116 10,900 European Space Agency: UK Contribution 10,900

88,808 137,020 (2) Other 264,040

4,887 3,342 A2 Patent Office 1,955

4,887 3,342 Cost of Capital 1,955

23,577 22,869 A3 Research Establishments Major Building Works 5,276

495 1,199 A4 National Weights and Measures Laboratory Executive Agency 729

327 968 (1) Administration costs 4980 0 (2) Programme costs 0

168 231 (3) Capital expenditure on scientific and computer equipment, 231office machinery, fixtures and fittings

-60,069 3,750 A5 Non-cash expenditure associated with the above programmes 101,301

288 214 (1) National Weights and Measures Laboratory Executive Agency 214-60,357 3,536 (2) Other 101,087

99,375 201,237 Gross total 406,258

Less

37,677 35,441 AZ Appropriations in Aid 44,971

6,874 4,307 AZ01 Innovation 4,307

57 (1) Space 576,874 4,250 (2) Other Receipts - Innovation 4,250

30,166 30,166 AZ02 Patent Office 40,166

30,000 30,000 (1) Withdrawal from reserves 40,000166 166 (2) Repayment of principal of long term loans 166

637 968 AZ03 National Weights and Measures Laboratory Executive Agency 498

637 968 Administration cost receipts 498

61,698 165,796 Net Total 361,287

20 0 Knowledge Transfer and Innovation Capital Modernisation Fund 0

20 0 Business Incubators 0

Function B: Extending Competitive Markets

57,392 53,556 B1 Consumer Protection 52,869

24 169 (1) National Industry Consumer Councils 16917,784 19,700 (2) Citizens' Advice 19,70039,619 33,687 (3) Miscellaneous Consumer Protection 33,000

-35 0 (4) Invest to Save projects 0

Department of Trade and Industry Request for Resources 1: Increasing UK

CompetitivenessTable B1

4,485 9,791 B2 Trade Policy and Related Subscriptions 6,827

289 6,013 (1) Trade Policy, including Joint Commissions, publicity, promotion, 3,049tariff suspensions, OECD Steel Subscription

4,196 3,778 (2) Subscription to the World Trade Organisation 3,778

77,236 87,898 B3 Office of Communications (Ofcom) 72,755

28,356 86,629 (1) Grant to Ofcom 72,200449 (2) Capital expenditure

880 820 (3) Cost of Capital 55548,000 (4) Support for establishment of Ofcom

777 7,001 B4 Spectrum Efficiency Scheme 5,000

777 7,001 Spectrum Efficiency Scheme expenditure 5,00079,086 0 B5 Radiocommunications Executive Agency 0

72,794 0 (1) Administration costs 0

72,794 0 Administration costs239 0 (2) Other current expenditure 0

239 0 Other current expenditure1,033 0 (3) Capital expenditure 0

1,033 0 Capital expenditure on scientific and computer equipment, office machinery, fixtures and fittings

5,020 0 (4) Non-cash expenditure associated with the above programmes 0

5,020 0 Cost of capital, depreciation and provision movements

218,976 158,246 Gross Total 137,451

less

95,890 104,919 BZ Appropriations in Aid 111,033

324 109 BZ01 Consumer Protection 109

324 109 Receipts in respect of legal costs and fees paid to Treasury Solicitors 109

0 10 BZ02 Trade Policy and Related Subscriptions 0

0 10 Spearhead Receipts

9,498 10,484 BZ03 Consumer Council for Postal Services (POSTCOMM) 9,169

9,498 10,484 Receipts from Consumer Council Licence Fees 9,169

34,866 87,316 BZ04 Office of Communications (Ofcom) 96,755

28,356 87,316 (1) Receipts from fees and services to other Government 72,755Departments and the private sector

6,510 (2) Repayment of loan for establishment of Ofcom 24,000

777 7,000 BZ05 Spectrum Efficiency Scheme 5,000

777 7,000 Spectrum Efficiency Scheme receipts 5,000

50,425 0 BZ06 Radiocommunications Executive Agency 0

50,425 0 Receipts from fees and services to other Government Departments and the private sector

123,086 53,327 Net total 26,418

10,000 0 Extending Competitive Markets Capital Modernisation Fund 0

10,000 0 Consumer Protection 0

10,000 0 Citizens Advice IT Gateway

Function C: Security of Energy Supply

8,036 7,203 C1 Non-Nuclear Expenditure of a Regulatory Nature 6,385

6,730 5,957 (1) Regulation of the offshore oil and gas industries 5,13937 37 (2) Gas and Electricity Consumer Council (Energywatch) pensions 37

100 100 (3) Public inquiries 100909 849 (4) Subscription to the International Energy Agency 849260 260 (5) Contribution to the European Energy Charter 260

433 20,000 C2 Assistance to the Coal Industry 0

433 20,000 Investment aid to the Coal industry 0

183 0 C3 Coal Operating Subsidy 0

-26 (1) Cost of capital charges209 (2) Additional provision and revaluation of existing provision

8,652 27,203 Gross Total 6,385

All in £000s

2003/04 2004/05 2005/06


Provision


184

less

13,014 14,073 CZ Appropriations in Aid 13,220

13,014 14,023 CZ01 Non-Nuclear Expenditure of a Regulatory Nature 13,220

1,141 730 (1) Receipts arising from public inquiries under the Electricity Act 120Offshore Geology programme, and Chemicals Notification Scheme

11,873 13,293 (2) Receipts from Gas and Electricity Consumer Council (Energywatch) 13,100Licence Fees

0 50 CZ02 Coal Operating Subsidy 0

0 50 Recoveries of overpayments 0

-4,362 13,130 Net Total -6,835

Security of Energy Supply Capital Modernisation Fund

211 0 Non-Nuclear Expenditure of a Regulatory Nature 0

211 UK Oil Portal

Function D: Sustainability and the Environment

22,113 86,963 D1 Non-Nuclear Expenditure Directly Related to the Creation of

Open Markets 99,725

15,860 18,573 (1) New and renewable sources of energy 6,3358,300 8,300 (2) Clean coal technology 8,3001,700 1,700 (3) Oil and gas competitiveness 1,7001,390 1,390 (4) Environmental, economic and statistical advice, and other 1,390

assistance relating to energy programmes and the annualEnergy Report

-5,137 47,000 (5) Capital Grants to the Private Sector in relation to renewable energy 72,00010,000 (6) Performance and Innovation Fund 10,000

22,113 86,963 Gross Total 99,725

less

6 198 DZ Appropriations in Aid 710

6 198 DZ01 Non-Nuclear Expenditure Directly Related to the Creation

of Open Markets 710

6 198 Receipts in respect of new and renewable sources of energy, clean coal, and oil and gas competitiveness 710

22,107 86,765 Net Total 99,015

10,166 0 Sustainability and the Environment Capital Modernisation Fund 0

10,166 0 Non-Nuclear Expenditure Directly Related to the Creation 0

of Open Markets

10,166 0 Renewable Energy

Function E: Enterprise Growth and Business Investment

199,925 246,320 E1 Small Business Service 40,517

174,808 230,820 (1) Other Support for Small Business 25,0177,500 7,500 (2) Farm Business Advice Service 7,5005,100 8,000 (3) Gateway, Electronic Regulation Service Projects and UK Science

Parks capital grants 8,0008,874 0 (4) Business.gov - Capital Modernisation Fund3,683 (5) National Gateway project - Capital Modernisation Fund

-40 (6) Business Links

66,369 79,850 E2 Small Business Service Investment 68,847

46,594 27,000 (1) SMART (excluding expenditure in Northern Ireland) 27,0003,717 18,250 (2) Enterprise Fund - current 24,847

16,058 34,600 (3) Enterprise Fund - capital 17,000

324,735 4,609 E3 Aerospace Launch Investment 1,207

1,263 3,679 (1) Aerospace Launch Investment expenditure - current 1,207323,472 930 (2) Aerospace Launch Investment expenditure - capital

207,700 129,183 E4 Innovation in Support of Commercial Best Practice 31,610

-27 (1) Capital Modernisation Fund projects20 (2) Invest to Save projects

207,707 129,183 (3) Other 31,610

211,800 0 E5 Assistance to British Energy 0

211,800 0 Loan to British Energy 0

All in £000s

2003/04 2004/05 2005/06


Provision


185

300 155 E6 Exchange risk and other guarantees 0

300 155 Exchange risk and other guarantees

58,745 95,426 E7 Non-cash expenditure associated with the above programmes 59,047

58,745 95,426 Cost of capital, depreciation and provisions 59,047

1,069,574 555,543 Gross Total 201,228

less

246,987 47,626 EZ Appropriations in Aid 16,450

5,907 7,500 EZ01 Small Business Service 7,500

5,907 5,593 (1) Farm Business Advice Service - Receipts from DEFRA 5,5931,907 (2) Rural Business Advice Service - Receipts from DEFRA 1,907

12,519 8,950 EZ02 Small Business Service Investment 8,950

6,386 5,730 (1) Small Firms Loan Guarantee Scheme - Premium Receipts 5,7303,220 3,220 (2) Small Firms Loan Guarantee Scheme - Recoveries 3,2202,913 (3) SMART external recoveries

16,743 28,930 EZ03 Aerospace Launch Investment 0

16,743 28,930 Launch Investment receipts 0

0 2,191 EZ04 Innovation in Support of Commercial Best Practice 0

2,191 Other Receipts - Innovation

211,800 0 EZ05 Assistance to British Energy 0

211,800 0 Repayment of loan to British Energy

18 55 EZ06 Exchange risk and other guarantees 0

18 55 Premium income from, and other receipts related to, guarantees on European Investment Bank and European Coal and Steel Community loans

822,587 507,917 Net Total 184,778

2,500 0 Enterprise Growth and Business Investment Capital

Modernisation Fund 0

2,500 0 Innovation in Support of Commercial Best Practice 0

2,500 0 Novel Recycling Techniques 0

Function F: Regional Economies

9,342 8,200 F1 Regional Innovation Fund 2,000

27,963 65,000 F2 Regional Selective Assistance 56,250

27,963 65,000 Grants to investment projects which create new jobs or safeguard 56,250existing employment in the assisted areas of England and related consultancy

0 227 F3 Co-financed ERDF and Other Payments 0

0 227 Leader Network Projects 0

37,305 73,427 Gross total 58,250

less:

1,375,410 1,289,372 FZ Appropriations in Aid 1,352,503

2,027 250 FZ01 Recoveries of Regional Selective Assistance Grants 250

2,027 250 Refund of Section 7 grants 250

1,373,383 1,288,989 FZ02 Receipts from other Government Departments in relation to

Regional Development Agencies 1,352,253

464,651 416,452 (1) Current receipts from the Office of the Deputy Prime Minister 422,95231,034 24,034 (2) Current receipts from Department of Environment, Food and 50,000

Rural Affairs45,310 42,500 (3) Current receipts from Department for Education and Skills 42,50012,930 13,230 (4) Current receipts from UK Trade and Investment 13,200

3,600 (5) Current receipts from Department of Culture, Media and Sport 3,600279,923 686,648 (6) Capital grants receipts from the Office of the Deputy 641,000

Prime Minister22,525 21,525 (7) Capital grants receipts from Department of Environment, 21,500

Food and Rural Affairs517,010 81,000 (8) Capital receipts from the Office of the Deputy Prime Minister 157,501

0 133 FZ03 Co-financed ERDF and Other Payments 0

0 133 Leader Network receipts from other Government Departments 0

-1,338,105 -1,215,945 Net Total -1,294,253

All in £000s

2003/04 2004/05 2005/06


Provision


186

Function G: Trade and Investment

34,972 36,610 G1 UK Trade and Investment administration 36,336

35,060 36,610 (1) Departmental staff 36,336-88 0 (2) Capital expenditure 0

306 0 G2 Non-cash expenditure associated with the above programmes 382

306 0 Impairment of Fixed Assets 382

35,278 36,610 Gross Total 36,718

less

167 350 GZ Appropriations in Aid 0

167 350 GZ01 UK Trade and Investment administration 0

167 350 Receipts from other Government Departments 0

35,111 36,260 Net total 36,718

Function H: Maximising Potential in the Workplace

22,764 14,834 H1 Employment Relations 16,893

11,111 3,635 (1) Programme awareness and support activities 5,694550 550 (2) Evaluation and Research 550

3,451 3,349 (3) National Minimum Wage and EC Directives, including Working 3,349Time Directive

1,500 1,500 (4) Partnership Training Fund 1,500500 500 (5) Low Pay Commission 500

5,452 4,400 (6) Work-life balance 4,400200 900 (7) Women and Equality 900

69,166 64,531 H2 Employment Tribunals Service 71,782

25,482 23,065 (1) Administration Costs 27,31242,645 40,091 (2) Judicial Costs 42,840

989 1,075 (3) Capital costs 1,60050 300 (4) Invest to Save 30

44,080 48,670 H3 Advisory Conciliation and Arbitration Service (ACAS) 48,430

44,080 47,520 (1) Programme expenditure 47,2801,150 (2) Capital expenditure 1,150

2,405 4,531 H4 External Legal Fees and Office of Manpower Economics 4,603

Consultancy

2,317 2,703 (1) Expenditure on external legal fees 2,93188 1,828 (2) Office of Manpower Economics Consultancy 1,672

3,306 3,237 H5 Non-cash expenditure associated with the above programmes 3,877

1,586 1,477 (1) Employment Tribunals Service 2,1171,720 1,760 (2) Advisory Conciliation and Arbitration Service 1,760

141,721 135,803 Gross Total 145,585

less

398 2,808 HZ Appropriations in Aid 553

-10 0 HZ01 Employment Relations 0

-10 0 Receipts from other departments 0

192 105 HZ02 Employment Tribunals Service 350

192 105 (1) Administration receipts from other departments 210(2) Programme receipts from other departments 140

0 2,500 HZ03 Advisory Conciliation and Arbitration Service (ACAS) 0

2,500 Programme receipts from other departments

216 203 HZ04 External Legal Fees and Office of Manpower 203

Economics Consultancy

216 203 Prosecution and Treasury Solicitors receipts 203

141,323 132,995 Net Total 145,032

All in £000s

2003/04 2004/05 2005/06


Provision


187

Function I: Corporate Activity and Insolvency Framework

9,000 9,000 I1 Investor Protection 10,395

2,400 2,400 (1) Administration of late filing penalties 2,4004,007 4,007 (2) Company investigations 4,0072,593 2,593 (3) FRC and Corporate Law Reform 3,988

72,253 113,421 I2 Insolvency Service 85,308

72,667 9,782 (1) Administration Costs of the Insolvency Service 1,800102,262 (2) Programme Costs of the Insolvency Service 83,258

-1,204 400 (3) Capital Costs of the Insolvency Service 100577 (4) Invest to Save projects 150

790 400 (5) Cost of capital and depreciation 0

1,536 1,644 I3 Companies House 1,631

1,536 1,644 Cost of Capital 1,631

82,789 124,065 Gross Total 97,334

less:

68,952 111,429 IZ Appropriations in aid 45,085

68,567 111,044 IZ01 Insolvency Service 44,700

68,567 8,782 (1) Administration receipts: fees and costs from bankruptcies 44,700102,262 (2) Programme receipts: fees and costs from bankruptcies

385 385 IZ02 Companies House 385

385 385 Repayment of principal of long term loans 385

13,837 12,636 Net total 52,249

Function J: Assets and Liabilities

22,223 104,197 J1 Non-cash Concessionary Fuel provisions expenditure 37,476

31,311 49,767 (1) Cost of capital charges in respect of Concessionary Fuel and 20,946related Liabilities, and associated assets

-9,088 54,430 (2) Additional provision and revaluation of existing provision in respect of Concessionary Fuel and related Liabilities 16,530

27 77 J2 Coal subsidence adviser, statutory arbitration arrangements 77

27 77 Costs of the subsidence adviser and statutory arbitration arrangements 77

0 50 J3 Coal Authority 0

0 50 Consultancy Advice in relation to the Coal Authority 0

18,441 41,000 J4 Nuclear Liabilities Management 5,000

13,941 14,600 (1) Consultancy related to BNFL 5,0004,500 26,400 (2) Establishment of Liabilities Management Unit 0

-1,935 0 J5 United Kingdom Atomic Energy Authority -1,500

-1,935 Cost of Capital credit on property and restructuring liabilities -1,500

4,912 3,000 J6 British Energy Liabilities 0

4,912 3,000 Advisers in relation to British Energy

0 0 J7 Export Credits Guarantee Department Restructuring Fund 5,000

DTI contribution to costbase restructuring of Export Credits Guarantee Department 5,000

2,827 3,716 J8 Telecommunications and Posts 3,278

1,912 1,888 (1) Subscription to International Telecommunications Union 1,888915 915 (2) Subscription to Universal Postal Union and Conference of 915

European Posts and Telecommunications Administrations913 (3) Other telecommunications and posts expenditure 475

2,066 1,800 J9 Post Office Consultancy and Other Expenditure Related 1,800

to the Post Office

2,066 1,800 Advisers' Fees in connection with the proposed restructuring of the Post Office 1,800

69,258 75,000 J10 Modernisation of the Post Office Network 0

69,258 75,000 Payments in respect of Post Office Network 0

380 0 J11 Support for the Steel Industry 0

9 (1) Grant to the steel industry-65 (2) Cost of capital charges

436 (3) Additional provision and revaluation of existing provision

1,937 0 J12 Trawlermen Compensation Scheme 0

-42 (1) Cost of capital charges1,979 (2) Additional provision and revaluation of existing provision

All in £000s

2003/04 2004/05 2005/06


Provision


188

3,356 0 J13 Enemy Property 0

-198 (1) Cost of capital charges3,554 (2) Additional provision and revaluation of existing provision

-12,440 0 J14 Transfer of Undertakings (Protection of Employment) 0

-214 (1) Cost of capital charges-12,226 (2) Revaluation of existing provision

1,290 1,644 J15 Assistance to Shipbuilding 0

1,005 1,050 (1) Home Shipbuilding Credit Guarantee Scheme285 594 (2) Intervention Fund 0

-70 1,260 J16 British Shipbuilders -42

-70 1,260 (1) Cost of Capital in relation to assets of British Shipbuilders -420 (2) Additional provision and revaluation of existing provision

112,272 231,744 Gross Total 51,089

less

20,010 14,033 JZ Appropriations in Aid 1,064,489

10,031 10,034 JZ01 Non ring-fenced coal liabilities 10,034

10,031 10,000 (1) Release from Investment Reserve 10,0000 34 (2) Recoveries of overpayments in connection with ex-employee 34

liabilities

28 77 JZ02 Subsidence adviser, statutory arbitration arrangements 77

28 77 Subsidence Adviser and statutory arbitration arrangements: receipts in connection with services or activities intended to operate on a cost recovery basis 77

0 0 JZ03 Nuclear Decommissioning Authority 1,051,100

External income from the nuclear industry 1,051,100

700 3,278 JZ04 Telecommunications and Posts 3,278

0 1,888 (1) International Telecommunications Union Receipts 1,888700 1,390 (2) Other Receipts - Telecommunications and Posts 1,390

1,553 644 JZ05 Assistance to the Shipbuilding Industry 0

100 100 (1) Premium income from shipbuilding credit guarantees and repayment expenses 0

1,453 544 (2) Repayments of Intervention Fund grants and re-imbursements 0by Home Shipbuilding Credit Guarantee Scheme borrowers on interest charged on late repayment of principal

7,698 0 JZ06 British Coal Corporation 0

7,698 Book value of asset disposals

92,262 217,711 Net total -1,013,400

Function K: Nuclear Security and Export Control

2,651 800 K1 Nuclear Safety and Security 246

2,301 450 (1) Civil Nuclear Emergency Planning350 350 (2) Nuclear Energy Agency 246

42,136 35,475 K2 Nuclear Support for the Former Soviet Union 30,000

42,136 35,475 Nuclear Support for the Former Soviet Union 30,000

15,820 16,550 K3 Non-Proliferation 22,000

10,018 10,748 (1) International Atomic Energy Agency 16,1984,332 4,332 (2) Organisation for the Prohibition of Chemical Weapons and 4,332

Organisation for the Prohibition of Biological Weapons1,200 1,200 (3) Safeguards Support for International Atomic Energy Agency 1,200

250 250 (4) Support for DTI Safeguards Office 25020 20 (5) Non-Proliferation Studies 20

60,607 52,825 Gross Total 52,246

less:

28 0 KZ Appropriations in Aid 0

28 0 KZ01 Non-Proliferation 0

28 Receipts from Awareness Seminars

60,579 52,825 Net total 52,246

All in £000s

2003/04 2004/05 2005/06


Provision


189

Function L: Activities in Support of all Objectives

179,150 324,114 L1 Administration and Other Costs related to Legal and Regulatory 318,905

Framework and Markets

118 118 (1) Share of salaries of Ministers and special advisers 118155,839 285,522 (2) Departmental staff, excluding Ministers 298,087

1,884 1,960 (3) Office of Manpower Economics administration costs 1,9607,490 21,530 (4) Share of Departmental capital expenditure (including Capital 6,080

Modernisation Fund expenditure)13,819 14,236 (5) Share of expenditure on Central Publicity, Queen's Awards, 12,158

Secondments and Consultancy0 748 (6) Invest to Save (Administration and Capital expenditure) 502

660 200 L2 Suppliers of Departmental central services 200

Central Services net expenditure

2,551 2,500 (1) Administration costs 2,500

less:

1,891 2,300 (2) Receipts from DTI, excluding DTI Trading Funds: 2,300

1,891 2,300 Allowable administration cost related receipts 2,300

129,830 8,816 L3 Administration and Other Costs related to Promotion of 0

Enterprise, Innovation and Productivity

118 (1) Share of salaries of Ministers and special advisers123,531 (2) Departmental staff, excluding Ministers

6,181 6,181 (3) Share of Departmental capital expenditure0 2,635 (4) Share of expenditure on Central Publicity, Queen's Awards,

Secondments and Consultancy

18,210 43,458 L4 Non-cash expenditure associated with the above programmes 15,075

18,210 43,458 Cost of capital, depreciation, Notional Audit Fee, provisions movements 15,075

327,850 376,588 Gross Total 334,180

less:

11,498 14,093 LZ Appropriations in Aid 9,175

8,608 8,188 LZ01 Administration and Other Costs related to Legal and 7,307

Regulatory Framework and Markets

8,560 4,191 (1) Share of receipts netted off in forming Administration Costs 2,454Limit (includes share of Other Government Departments and Other Services receipts)

562 (2) Programme Costs: Other Receipts 56248 3,435 (3) Book Value of Tangible Asset Sales 4,291

421 200 LZ02 Suppliers of departmental central services 200

Receipts from other Government Departments, DTI trading funds and the private sector

421 200 Departmental Central Services: Allowable administration cost receipts 200

2,469 5,705 LZ03 Administration and Other Costs related to Promotion of

Enterprise, Innovation and Productivity 1,668

2,016 2,230 (1) Share of receipts netted off in forming Administration Costs Limit 1,668(includes share of Other Government Departments and Other Services receipts)

453 3,475 (2) Book Value of Tangible Asset Sales 0

316,352 362,495 Net total 325,005


Support for Local Authorities

Function M: Current Grants to the London Development Agency

137,500 154,997 M1 London Development Agency 148,700

137,500 154,997 Grant to London Development Agency 148,700

137,500 154,997 Gross Total 148,700

less

107,281 116,248 MZ Appropriations in Aid 148,699

98,555 107,522 (1) Receipts from the Office of the Deputy Prime Minister 148,6997,581 7,581 (2) Receipts from Department for Education and Skills 01,145 1,145 (3) Receipts from UK Trade and Investment 0

30,219 38,749 Net total 1

All in £000s

2003/04 2004/05 2005/06


Provision


190

Function N: Capital Grants to the London Development Agency

179,872 160,352 N1 London Development Agency 142,500

179,872 160,352 Capital Grant to London Development Agency 142,500

179,872 160,352 Gross Total 142,500

less

142,800 144,317 NZ Appropriations in Aid 142,499

142,800 144,317 NZ01 London Development Agency 142,499

142,800 144,317 Receipts from the Office of the Deputy Prime Minister 142,499

37,072 16,035 Net total 1

Spending in Annually Managed Expenditure

Central Government spending

Function O: Assets and Liabilities

407,271 214,000 O1 Non cash nuclear provisions expenditure 127,410

-414,169 -461,000 (1) Cost of capital charges -490,038821,440 675,000 (2) Additional provision and revaluation of existing provision in 617,448

respect of Nuclear Liabilities

775,525 112,896 O2 Non-cash coal health provisions expenditure -11,387

-88,850 -3,098 (1) Cost of capital charges in respect of Coal Health Liabilities, and -72,433associated assets

864,375 115,994 (2) Additional provision and revaluation of existing provision in 61,046respect of Coal Health Liabilities

34,372 -20 O3 Privatisation of the coal industry 93

-1,443 -449 (1) Cost of capital charges -44935,815 429 (2) Additional provision and revaluation of existing provision in 542

respect of Coal Privatisation Liabilities

935,000 20,000,000 O4 Support to Royal Mail 35,000,000

935,000 20,000,000 Working capital facility for Royal Mail 35,000,000

0 3 O5 Privatisation of the Electricity Industry 0

0 3 Privatisation of the electricity industry in England and Wales 0

0 883 O6 Privatisation of the nuclear power industry 0

0 4 (1) Residual expenses 00 265 (2) Cost of capital charges 00 614 (3) Movement in provision 0

2,152,168 20,327,762 Gross Total 35,116,116

less:

885,434 19,000,008 OZ Appropriations in Aid 34,950,005

434 5 OZ01 Coal health provisions 5

434 5 Recoveries of overpayments in connection with ex-employee 5health liabilities

885,000 19,000,000 OZ02: Support to Royal Mail 34,950,000

885,000 19,000,000 Repayment of working capital for Royal Mail 34,950,000

0 3 OZ03 Privatisation of the nuclear power industry 0

0 3 Receipts from the sale of the nuclear power industry 0

1,266,734 1,327,754 Net Total 166,111


Support for Local Authorities

Function P: Regional Economies

223 2,284 P1 London Development Agency 1,777

223 2,284 Corporation Tax 1,777

223 2,284 Gross and Net Total 1,777

All in £000s

2003/04 2004/05 2005/06


Provision


191

Non-Budget

Function Q: Extending Competitive Markets

33,298 21,356 Q1 Consumer and Investor Protection 31,150

3,419 3,461 (1) Consumer Groups and Councils Grant in Aid 3,27129,879 17,895 (2) Competition Commission and Competition Service Grant in Aid 27,879

1,278 700 Q2 Trade Policy 700

1,278 700 Grant in Aid to Simpler Trade Procedures Board (SITPRO) 700

9,905 10,485 Q3 Regulation of the Postal Industry 9,170

9,905 10,485 Grant-in-Aid to Consumer Council for Postal Services (POSTWATCH) 9,170

44,481 32,541 Gross and Net Total 41,020

Function R: Security of Energy Supply

12,392 13,293 R1 Non-Nuclear Expenditure of a Regulatory Nature 13,100

12,392 13,293 Gas and Electricity Consumer Council (Energywatch) Grant in Aid 13,100

15,872 10,600 R2 Petroleum licensing and royalty 10,600

5,872 600 (a) Refunds and repayments under petroleum licences 600

600 600 (1) Refunds and repayments of overpayments of application fees 600and of initial and periodic payments for licences

5,272 (2) Repayments of royalty, including any interest dueRoyalty payments are collected on account and are subsequently adjusted when actual amounts due have been determined. Repayments may also be made under the Petroleum Act 1998

10,000 10,000 (b) Payments to Northern Ireland 10,000

10,000 10,000 Proportion of proceeds from petroleum licensing and royalties 10,000

28,264 23,893 Gross total 23,700

less:

15,872 10,599 RZ Appropriations in Aid 10,599

15,872 10,599 RZ01 Petroleum licences and royalty 10,599

15,872 10,599 Application fees for petroleum exploration and production licences, and initial and periodic payments. Royalty on petroleum won and saved. 10,599

12,392 13,294 Net total 13,101

Function S: Enterprise Growth and Business Investment

6,500 6,705 S1 Innovation in Support of Knowledge Transfer 6,500

6,500 6,705 Grant-in-Aid to the Design Council 6,500

0 0 S2 Small Business Service Investment 3,252

Small Firms Loan Guarantee Scheme - increase in balance sheet value of provisions due to change in discount rate 3,252


Function T: Regional Economies

1,381,264 1,545,426 T1 Regional Development Agencies 1,822,304

1,376,264 1,540,426 (1) Grant in Aid to the Regional Development Agencies 1,817,3045,000 5,000 (2) Corporation Tax payments to the Regional Development Agencies 5,000

1,381,264 1,545,426 Gross Total 1,822,304

less:-3,557 7,944 TZ Appropriations in Aid 250

-3,557 7,944 TZ01 ERDF and other receipts 250

250 (1) EHLASS 250-3,557 6,100 (2) Business Development

1,500 (3) Technology Transfer0 94 (4) Leader Network

1,384,821 1,537,482 Net Total 1,822,054

Function U: Maximising Potential in the Workplace

7,426 8,255 U1 Employment Relations 7,914

7,426 8,255 Equal Opportunities Commission Grant in Aid 7,914


All in £000s

2003/04 2004/05 2005/06


Provision


192

Function V: Corporate Activity and Insolvency Framework

541 392 V1 Refunds of pension adjustments to pensioners for UK income tax 392

482 333 (1) European Space Agency 33359 59 (2) European Patent Office 59

541 392 Gross and Net Total 392

Function W: Assets and Liabilities

0 0 W1 Nuclear Decommissioning Authority 6,214,919

(1) Grant in Aid 1,763,164(2) Increase in balance sheet value of provisions due to change in 4,451,755

discount rate

17,528 35,078 W2 United Kingdom Atomic Energy Authority 46,790

17,528 35,078 (1) Grant in Aid 44,254(2) Increase in balance sheet value of provisions due to change in 2,536

discount rate

25,800 27,300 W4 Coal Authority 27,169

25,800 27,300 Grant in Aid 27,169

0 0 W5 Non-cash coal health provisions expenditure 86,879

Increase in balance sheet value of provisions due to change in discount rate 86,879

0 0 W6 Non-cash Concessionary Fuel provisions expenditure 31,153

Increase in balance sheet value of provisions due to change in 31,153discount rate

43,328 62,378 Gross Total 6,406,910

less

2,590 3 WZ Appropriations in Aid 3

15 3 WZ01 Privatisation of the electricity industry in England and Wales 3

15 3 Receipts from the sale of shares in the electricity industry 3

2,575 0 WZ02 Receipts from European Community programmes 0

2,284 (1) Contributions from the European Coal and Steel Community towardsbenefits paid under the Iron and Steel Employees Readaptation BenefitsScheme (classified as programme 2.7 (net payments to EuropeanCommunity Institutions))

291 0 (2) Receipts from the European Coal and Steel Community against 0payments of restructuring grants to British Coal Corporation

40,738 62,375 Net Total 6,406,907

Function X: Nuclear Security and Export Control

0 0 X1 Civil Nuclear Police Authority 6,000

Grant in aid 6,000

0 0 Gross and Net Total 6,000

6,220,976 24,385,239 Gross total 45,353,534

3,020,457 20,913,461 Gross receipts 37,910,244

3,200,519 3,471,778 Net Total 7,443,290

All in £000s

2003/04 2004/05 2005/06


Provision


193

Payments In Respect of Provisions (All DEL unless indicated)

926,120 847,800 (1) Coal Health Liabilities (AME) 1,312,50553,166 56,700 (2) Small Firms Loan Guarantee Scheme 56,70067,963 52,350 (3) Concessionary Fuel and related Coal Liabilities 47,05611,153 13,951 (4) Indemnities and Warranties relating to Privatisation of the 13,951

Coal Industry (AME)185 5,328 (5) National Physical Laboratory at Teddington 4,384

1,377 (6) Liberata 1,08858 64 (7) Science Research Councils' pensions scheme (AME) 67

260,505 291,544 UKAEA Decommissioning185,000 British Energy Decommissioning

368 1,510 Distant Water Trawlermen4,492 Enemy Property4,077 Early Retirement1,750 Britech1,101 Steel industry liabilities

149 Radiocommunications Agency - Early Retirement137 Phoenix Fund

1,331,224 1,455,624 TOTAL EXPENDITURE IN RESPECT OF PROVISIONS 1,435,751

Extra receipts payable to the Consolidated Fund

In addition to appropriations in aid there are the following

estimated receipts:

391,000 329,000 (1) Distribution of surpluses from coal industry pension schemes 328,000(within OCS and AME)

80,172 1,655 (2) Levies on sales of aero engines and airframes (within DEL) 158,30048,035 67,000 (3) Application fees for petroleum exploration and production 67,000

licences, and initial and periodic payments (rents). Royalty on petroleum won and saved.

880 58,764 (4) Ofcom: Interest on loans advanced by the Secretary of State 57,297(within OCS)

30,500 12,000 (5) Companies House receipts from late filing penalties 12,000876 4,200 (6) Receipts of the Coal Authority 4,200

0 4,200 (7) Privatisation of the coal industry including property clawback 4,200receipts (within AME)

7,390 3,142 (8) Receipt of dividend from the Patent Office Executive Agency 1,751trading fund (within OCS and DEL)

2,583 1,553 (9) Receipt of dividend from the Companies House Executive Agency trading fund (within OCS and DEL) 1,582

(10) Receipt of dividend from Ofcom (within OCS and DEL) 555241 200 (11) Interest on loans advanced by the Secretary of State to the

Patent Office Executive Agency trading fund (within OCS and DEL) 20427 85 (12) Non-nuclear energy miscellaneous receipts 85

128 91 (13) Interest on loans advanced by the Secretary of State to the Companies House Executive Agency trading fund (within OCS and DEL) 49

2 (14) Privatisation of the electricity industry, including clawback receipts 21 Privatisation of AEA Technology – property and land clawback1 Privatisation of the nuclear power industry

54,743 0 Radiocommunications Agency (within OCS)37,700 Post Office Network Recoveries for Universal Banking Services3,632 Reimbursement of Royal Mail Legal and Commitment Fees (within DEL)1,528 Interest on loan to British Energy (within OCS and AME)1,239 Royal Mail Interest on Voted Loans (within OCS)

623 Consumer Protection472 Nuclear Safety and Security

412 Recovery of commitment fees related to working capital loan to British Energy (within AME)

136 Ofcom other recoveries10 National Selective Assistance3 Trade Policy

662,330 481,894 Total 635,225

All in £000s

2003/04 2004/05 2005/06


Provision


194

All in £000s

2003/04 2004/05 2005/06


Provision



29,740 31,140 A Research Councils' Pension Scheme 33,240

29,355 31,045 B The Royal Society 32,445

5,270 5,600 C The Royal Academy of Engineering 5,850

D The British Academy 13,330

2,518 8,198 E OST Initiatives 8,087

33,753 64,960 F Knowledge Transfer Programmes 79,140

1,880 0 (1) University Challenge Fund 025,481 60,306 (2) Higher Education Innovation Fund 69,425

310 4,654 (3) Exploitation of Discoveries at Public Sector Research Establishments 9,7156,082 0 (4) Science Enterprise Challenge Scheme 0

15,020 14,000 G Cambridge/Massachusetts Institute of Technology 1,000

2,966 2,000 H Foresight Link Awards 154

262,229 260,570 I Science Research Investment Fund 300,000

-3,610 4,923 J Science and Engineering Base Group Administration Costs 4,923

6,551 4,860 (1) Administration Costs 4,86063 63 (2) Share of Departmental capital expenditure 63

-10,224 (3) Cost of Capital and impairment of assets

less:

36 49 (JZ) Appropriations in Aid 49

36 0 (1) Administration Costs Related Receipts 049 (2) Capital Related Receipts 49

-3,646 4,874 Net Total 4,874

10,191 8,085 K Transdepartmental Science and Technology Group 8,085

Administration Costs

10,002 7,950 (1) Administration Costs 7,950135 135 (2) Share of Departmental capital expenditure 13554 (3) Cost of capital, depreciation and bad debts

less:

96 99 (KZ) Appropriations in Aid 99

-3 0 (1) Administration Costs Related Receipts 099 99 (2) Capital Related Receipts 99

10,095 7,986 Net Total 7,986

L Biotechnology and Biological Sciences Research Council

(LZ) Appropriations in Aid

1,000 Co-funding by Department for Environment, Food and Rural Affairs 1,000

0 -1,000 Gross and Net Total -1,000

43,631 36,000 Joint Infrastructure Fund

Spending in Annually Managed Expenditure:


0 12,132 M Research Councils' Pension Scheme 3,626

0 72 (1) Increase in value of liability due to interest on scheme liabilities 760 60 (2) Current Service Cost (increase in present value of scheme liabilities 50

expected to arise from employee service in the current period) and increase in value of liability arising from current service cost, past service cost, group and individual transfers and added years

12,000 (3) Bulk transfer of pension liabilities in respect of Horticulture 3,500Research International

less:

0 66 (MZ) Appropriations in Aid 67

0 66 Receipts of employees' and employers' contributions and transfer values 67

0 12,066 Net Total 3,559

Request for Resources 2: Increasing Scientific ExcellenceTable B1


195

Non-Budget

0 0 N Arts and Humanities Research Council - Grant-in-Aid 75,535

268,075 276,582 O Biotechnology and Biological Sciences Research Council - 310,815

Grant-in-Aid

91,264 112,860 P Economic and Social Research Council - Grant-in-Aid 119,864

425,000 490,000 Q Engineering and Physical Sciences Research Council - 541,129

Grant-in-Aid

409,932 414,799 R Medical Research Council - Grant-in-Aid 451,958

284,057 309,814 S Natural Environment Research Council - Grant-in-Aid 317,534

281,506 300,000 T Particle Physics and Astronomy Research Council - 287,717

Grant-in-Aid

76,659 114,063 U Council for the Central Laboratory of the Research 87,397

Councils - Grant-in-Aid

33,309 85,140 V Council for the Central Laboratory of the Research 50,500

Councils - Diamond Synchrotron

190 175 W Fees payable under the Animals (Scientific Procedures) 175

Act 1986

2,301,055 2,582,086 Gross total 2,732,504

132 1,214 Gross receipts 1,215

2,300,923 2,580,872 Net total 2,731,289

Extra receipts payable to the Consolidated Fund

In addition to appropriations in aid, there are the following estimated receipts:

375 Medical Research Council

375 0 Total 0

All in £000s

2003/04 2004/05 2005/06


Provision


196

All in £000s

2003/04 2004/05 2005/06


Provision



Function A: Payments of pensions, transfer values and

repayments of contributions

62 60 A1 Resource costs relating to payments of pensions, transfer

values and repayments of contributions 62

62 60 Notional Audit Fee 62

62 60 Gross and Net Total 62



Function B: Payments of pensions, transfer values and


267,261 287,893 B1 Resource costs relating to payments of pensions, transfer

values and repayments of contributions 294,314

183,520 192,000 (1) Increase in value of liability due to interest on scheme liabilities 195,85670,741 80,000 (2) Current Service Cost (increase in present value of scheme

liabilities expected to arise from employee service in the current period) 91,025

13,000 15,893 (3) Increase in value of liability arising from current service cost, past service cost, group and individual transfers and added years 7,433

less:

28,775 38,437 BZ Appropriations in aid 30,793

21,700 22,500 (1) UKAEA employees' contributions 23,31475 44 (2) UKAEA employers' contributions 45

7,000 15,893 (3) UKAEA transfer values received 7,434

238,486 249,456 Net total 263,521

Non-Budget

Function C: Payments of pensions, transfer values and


0 0 C1 Resource costs relating to payments of pensions, transfer

values and repayments of contributions 332,000

Increase in balance sheet value of provisions due to change in discount rate 332,000

0 0 Gross and Net Total 332,000

267,323 287,953 Gross total 626,376

28,775 38,437 Gross receipts 30,793

238,548 249,516 Net total 595,583

Payments In Respect of Provisions (AME)

141,279 150,511 (1) Payment of pensions etc 153,313Lump sums and annual pensions for age and ill-health retirements, lump sums on death, and dependants pensions

9,200 9,200 (2) Payment of transfer values 9,200Payments made when former members of the schemes join a new employer's occupational pension scheme or are transferred back to the State Additonal Pension Scheme. The transfer value is based on the members' accrued pension rights at the date of terminating employment covered by the schemes.

400 400 (3) Repayment of contributions 400

150,879 160,111 TOTAL EXPENDITURE IN RESPECT OF PROVISIONS 162,913

1,396 0 Extra receipts payable to the Consolidated Fund 0

In addition to appropriations in aid, there are the following estimated receipts.

1,396 Excess receipts not authorised to be used as appropriations inaid (within OCS)

1,396 0 Total 0

Request for Resources: United Kingdom Atomic Energy Authority Pension

SchemeTable B1


197

198

Annex B2

Statement of Contingent orNominal Liabilities


STATUTORY LIABILITIES CHARGED TO

DEPARTMENTAL ESTIMATES

140.0 Unquantifiable UnquantifiableHome Shipbuilding Credit Guarantee SchemeGuarantees to banks in respect of loans madeto UK Ship owners for the construction,completion or alteration of ships and offshoreinstallations.

Industry Act 1972, Section 10

Unquantifiable Unquantifiable UnquantifiableA guarantee has been given to the FinancialReporting Council that if the amount held inthe Legal costs fund falls below £1m in anyyear, an additional grant will be made to coverlegal costs subsequently incurred that year.

Companies Act 1985, Section 256 (asamended by the Companies Act1989)

86.271 116.29 136A liability under the Department’s Small FirmsLoan Guarantee Scheme on outstandingguarantees for loans granted over,approximately, the past 7 years.

Industrial Development Act 1982,Section 8

Unquantifiable Unquantifiable UnquantifiableDeeds of guarantee dated 31 October 1994 inrespect of British Coal Corporation PensionSchemes (Mineworkers Pension Scheme andBritish Coal Staff Superannuation Scheme) inwhich the Secretary of State agrees to meeta deficiency in the Schemes’ ability to fundpension benefits laid down in the Schemes.

Coal Industry Act 1994, Schedule 5,Paragraph 2 (9)

Unquantifiable Unquantifiable UnquantifiableIndemnities given to the UKAEA by theSecretary of State to cover certainindemnities given by UKAEA to carriers andBritish Nuclear Fuels against certain claims fordamage caused by Nuclear matter in thecourse of carriage.

Atomic Energy Authority Acts 1954and 1971

up to 140(approximatelyper incident)

up to 140(approximatelyper incident)

UnquantifiableStatutory liability for third party claims inexcess of the operator’s liability in the eventof a nuclear accident in the UK.

Nuclear Installations Act 1965,Sections 16 to 18, as amended bythe Energy Act 1983

Unquantifiable Unquantifiable UnquantifiableBAe: Liabilities immediately prior toPrivatisation.

The Government assumed ultimateresponsibility for any outstanding liabilities ofBritish Aerospace existing immediately priorto its Privatisation on 18 February 1981. TheGovernment would only become responsiblein the event of a formal winding up of BAe oran order to wind up the company by the courtunder the Companies Act.

British Aerospace Act 1980, Section 9

Statute Nature of liability Amount Amount Amount

outstanding outstanding outstanding

at 31.3.2002 at 31.3.2003 at 31.3.2004

(£ million) (£ million) (£ million)

NON-STATUTORY LIABILITIES CHARGED

TO DEPARTMENTAL ESTIMATES

26,000 26,700 27,300Financial undertaking from the Government toBNFL in connection with the transfer of theGovernment’s shareholding in MagnoxElectric Plc to BNFL on 30 January 1998.

Unquantifiable Unquantifiable UnquantifiableLetter of comfort to AEA Technology who,under the terms of a collaboration agreementon a European project for undergroundgasification of coal, accept joint and severalliability.

8,500(approx.)

9,200(approx.)

9,000(approx.)

Costs of meeting waste management anddecommissioning liabilities at UKAEA sitesand certain similar liabilities of the UKAEA atBNFL sites.

21 Unquantifiable UnquantifiableAssurance that, subject to Parliamentaryapproval of any expenditure entailed, thegovernment would meet any net liabilities ofBritish Shipbuilders as recorded in theirAccounts. Beyond this general commitment,and subject to the same caveats, morespecific assurances have been given to meetcontingent liabilities associated with certain ofBS`s financial guarantees.

15 2.3 1.52Liability to make payments, under the Ironand Steelworkers Extra RehabilitationBenefits Scheme, to former Corus workersmade redundant.

Industrial Development Act 1982,Section 8

5,285 3,956 4,618Liabilities for various health-related and otherpayments to former employees of the BritishCoal Corporation

Coal Industry Act 1994

Unquantifiable Unquantifiable UnquantifiableThe Outer Space Act (1986) gives theSecretary of State the power to licence UKcompanies and nationals who intend toprocure and/or operate in space objects.Before issuing a licence BNSC requiresevidence of third party liability insurance of atleast £100 million. Any liability on HMG willtherefore only arise if a claim is in excess of£100 million. In addition, the Governor of theCayman Islands has also issued an Exemptionto Sea Launch for their test launch in March1999, under the Act as extended to CaymanIslands in 1998. This is the first time the Acthas been used for launchers rather thansatellites.

BNSC has issued the following licences: Twoto B Sky B, twelve to Surrey University, oneto British Aerospace Ltd, seven to MatraMarconi Space Ltd, two to Telenor UK Ltd,one to INMARSAT, and four to the Scienceand Engineering Research Council.

Additionally, the Governor of Hong Kong hasissued two licences to AsiaSat Ltd and two toAIT Satellite Company Ltd under the 1986 Actas extended to Hong Kong in 1990. TheGovernor of Gibraltar has also issued a licenceto GE (Gib) Communications Ltd under theAct as extended to Gibraltar in 1996.

Outer Space Act 1986


199



at 31.3.2002 at 31.3.2003 at 31.3.2004


Unquantifiable Unquantifiable UnquantifiableFurther Incidents/Accidents or insurance claimfor exposure to ionising radiation pursuedoutside the existing scheme

0.3 0.4 N/ARadiation Compensation Scheme and HealthMortality Programme Agreement

0.8BBSRC Bank Guarantee

15 15 nilThe Biotechnology and Biological SciencesResearch Council (BBSRC), formerly theAgricultural and Food Research Council(AFRC) has a contingent liability to meet theredundancy costs of BBSRC employeesattached to Horticultural ResearchInternational who are made redundant.

9.49 6.66 3.5“Back end” costs of decommissioningnuclear facilities for the Central Laboratory ofthe Research Councils and the MedicalResearch Council.

Unquantifiable Unquantifiable UnquantifiableIndemnity given to the police. The PoliceInformation Technology Organisation (HomeOffice) provides Legal Services Directorate D(DTI) with access to data from the PoliceNational Computer (PNC). The DTI hasindemnified the police against any liabilitiesthat they might incur as a result of providingthat access.

Unquantifiable Unquantifiable UnquantifiableWorld Intellectual Property Organisation.

The UK as a contracting state to the PatentCo-operation Treaty of 1970 has a potentialliability under Article 57 of the Treaty.

Unquantifiable Unquantifiable UnquantifiableEuropean Patent Office:

The UK as one of the contracting states has apotential liability under Article 40 of theEuropean Patent Convention of 1973.

1.96 1.96 1.96Callable capital subscription for the

Common Fund for Commodities:

Government is committed to the payment ofa subscription of £1.96m to the First Accountof the Fund, in the event that the Fund isunable to meet its liabilities in respect of FirstAccount operations.

2.24 2.24 2.24Paid in capital subscription for the

Common Fund for Commodities:

Government is committed to the payment ofa subscription of £4.48m to the First Accountof the Fund, half of which is in the form ofPromissory Notes callable following thecoming into operation of the first Account.

Up to 200 Up to 200 UnquantifiableDeed of indemnity in respect of potentialliabilities vested in National Grid Companyunder a CEGB/EdF protocol that governsresponsibilities in respect of theinterconnector linking England and France.


200



at 31.3.2002 at 31.3.2003 at 31.3.2004


UnquantifiableIndemnities equivalent to those given toBoard members of Non-Departmental PublicBodies (NDPBs) have been given to membersof the nine Regional Committees ofPostwatch (the Consumer Council for PostalServices);

UnquantifiableIndemnities equivalent to those given to civilservants under the Civil Service ManagementCode have been given to persons appointedto the Board of the Office of Fair Trading,including the Chairman;

0 500 500As part of the Royal Mail financing package,the Department agreed on 20 December2002 to buy two bonds issued by Royal Mail,the values of which are £200 million and £300million. The availability of the bond agreementruns until 20 March 2005. Terms of theagreement state that Royal Mail must requestthe transaction at least six months inadvance, that each bond must be utilised infull and that the Department must gainParliamentary approval before purchasing thebonds (as funds would come from DTI supplywhich is voted by Parliament). If theDepartment were to purchase the bonds,they would mature on 20 March 2009. RoyalMail did not request the purchase of eitherbond in 2003-04.

The Department has also made available toPost Office Limited, through an agreementreached on 17 October 2003, a revolving loanfacility of up to £1.15 billion. This is to helpthe company fund its working capitalrequirements in light of the migration of statebenefits payments to a system of directpayment, alongside a Governmentcommitment that benefit recipients will stillbe able to collect their benefit, in cash and infull, from post office branches. Post OfficeLimited began utilising this facility on 1December 2003. The agreement allows forthe company to have up to 30 concurrentloans out at any one time with loan periodswhich can be one day or longer. Theavailability of the facility ends on 30 March2010 and any outstanding loans must berepaid by 31 March 2010. This support wassubject to EU State Aids clearance, whichwas received in May 2003

0 3,046 3,912Various constructive obligations relating to therestructuring of British Energy.

73 72.1 73.433Local Network indemnities issued.

32 32 41.2United Kingdom’s share of debts of CERNliabilities

Unquantifiable Unquantifiable UnquantifiableThere is a very remote possibility that 3satellites in orbit belonging to PPARC/SERCmay collide with other satellites or aircraftbefore being removed from orbit. There isalso the potential that these satellites causedamage to the surface of the earth. If PPARCwere shown to be at fault for this damage, aliability would arise against HMG. Thepossibility of this arising is extremely remote.


201



at 31.3.2002 at 31.3.2003 at 31.3.2004


LIABILITIES EXPIRED IN THE 2003-04

FINANCIAL YEAR

Unquantifiable Unquantifiable N/aTreaty with the French Government relating tothe Concorde programme. The Governmentstands behind those companies involved in themanufacture and supply of services and othersupport to the aircraft. To the extent of anysuccessful claims in respect of themanufacturers’ product liability for lossesinvolving British owned and operated aircraft, theGovernment would ensure payments of claimsthat exceeded insurance cover against liability.

Unquantifiable UnquantifiableClaims have been lodged by a number ofemployees and ex-employees forcompensation for industrial injury or diseaseallegedly arising from a period of employmentat one or other of the former researchestablishments of the DTI.

Health and Safety

Unquantifiable UnquantifiableThere is a risk that the EC may seek recoveryfrom the Department of grants paid undervarious ERDF Community InitiativeProgrammes arising from our quantification ofthe financial impact of irregularities found inthree of the seven Community InitiativeProgrammes which the Department isresponsible for. The eventual liability thatmight crystallise is still uncertain and isdependent upon the EC’s formal notificationof its decision on the matter. However, workdone during the financial year to removequalifications from the internal audit opinionson six of the seven initiatives suggests thatthe Department’s potential exposure hasbeen significantly reduced.

EC Directives relating to StructuralFunds

Unquantifiable UnquantifiableThe Department has a range of civil nuclearliabilities arising through its association withUKAEA and BNFL as well as ensuring thatHMG complies with its obligations under thevarious international nuclear agreements andtreaties. The amount and timing of thisoverarching liability is not quantifiable.

In addition, the Government has had toprovide temporary indemnity to BritishNuclear Insurers to cover terrorism risks.

Nuclear

UnquantifiableAn indemnity was given, which expired on 4April 2004, by the Coal Authority to theadministrators of Coal Power Ltd relating topersonal liabilities arising out of environmentallegislation, subsidence claims andabandonment costs in relation to Hatfieldcolliery

UnquantifiableThe British Geological Survey, a constituentpart of NERC, has received notice of a claimbeing made against it by a number of peoplein Bangladesh;

UnquantifiableDecommissioning costs falling to PPARC as aresult of the possible future closure ofscientific facilities;


202



at 31.3.2002 at 31.3.2003 at 31.3.2004


203

Annex B3

Research Council’s Grant-in-Aid


Research Council Tables analysis of expenditure by type

Biotechnology and Biological Sciences Research Council

All in £000s

2003/04 2004/05 2005/06

Outturn Total Provision

Provision

Gross expenditure

7,500 8,000 Central Administration and Expenses 10,000

1,300 130 Restructuring/Superannuation 9,995

76,000 79,071 Grants and Contracts to Research Institutes and other 76,370

research bodies

79,071 a) Research Institutes 76,370

141,991 148,192 Grants for Research in Universities and Other Bodies 174,979

128,192 a) Current 151,47920,000 b) Capital 23,500

30,700 35,177 Postgraduate Awards 36,816

200 200 International Subscriptions 200

13,061 Non-Cash Items 13,379

13,061 Cost of Capital and Depreciation 13,379

257,691 283,831 Total Gross Recurrent Expenditure 321,739

18,427 19,090 Major Capital Expenditure 19,555

18,690 a) Institute’s etc. 19,130400 b) Administration 425

276,118 302,921 Total Gross Expenditure 341,294

Financed by:

267,918 287,571 Resource/Capital Budget 326,364

5,600 5,100 Current Receipts 5,330

a) Other Research Councils 5,000b) Miscellaneous Receipts 330

2,600 10,250 Capital Receipts 9,600

276,118 302,921 Total 341,294

Research Councils’ Grant-in-AidTable B3


Economic and Social Research Council

All in £000s

2003/04 2004/05 2005/06


Provision

6,930 7,420 Central Administration and Expenses 8,550

250 250 Re-structuring/Superannuation 250

Grants for Research in Universities and other bodies and

Research Dissemination

60,470 78,920 a) Current 83,2206,950 5,600 b) Capital 5,000




956 2,080 Major Capital Expenditure 600


Financed by:


Current Receipts

11,210 10,100 a) Government Departments 10,0000 0 b) Others 50

0 9,820 Transfers from Reserves (EYF) 2,000

102,120 125,220 TOTAL 135,240

Research Councils’ Grant-in-Aid (continued)Table B3


204


Engineering and Physical Sciences Research Council

All in £000s

2003/04 2004/05 2005/2006


Provision

Gross Expenditure

18,560 17,810 Central Administration 17,980

300 700 Restructuring 700

3,080 3,630 CCLRC 3,720




17,480 20,190 Other Expenditure on Research 17,370


8,110 1,600 Non-cash Items -4,400


830 900 Major Capital Expenditure 960

830 200 a) Central Administration 2000 700 b) Other Expenditure on Research 760


Financed by:



8,132 5,880 a) Government Departments 4,2207,419 3,540 b) Other Research Councils 3,3003,500 5,190 c) Other Bodies 4,820

240 200 d) Restructuring 2001,073 0 e) Other operating receipts 120

0 0 Capital Receipts 0

-35,244 870 Transfer to/from Reserves -8,830

453,510 512,990 Total 567,330



205


Medical Research Council

All in £000s

2003/04 2004/05 2005/06


Provision

Gross Expenditure


3,900 2,000 Restructuring 4,000

248,945 242,000 Council Institutes. Establishments and Other Staff 250,000

3,726 2,400 Grants and Contracts to Research Institutes and Other Bodies 2,199




7,788 10,000 International Subscriptions 10,300

7,629 6,000 Commercial Fund 6,000




Financed by:393,926 411,200 Resource/Capital Budget 466,900


24,668 21,499 a) Government Departments 21,7282,501 3,000 b) Commissions from the EU 3,000

29,259 25,501 c) Other 25,772

15,043 18,256 Commercial Fund Receipts 21,300


24,039 31,744 Transfer to/from Reserves -11,401

489,486 511,200 Total 527,299



206


Natural Environment Research Council

All in £000s

2003/04 2004/05 2005/06


Provision

Gross Expenditure


2,999 5,482 a) NERC Central Administration 5,6191,376 1,410 b) Joint Services provided to other Councils 1,445

358 0 c) Swindon Office refurbishment 0

5,410 4,019 Staff Restructuring 2,859

133,129 141,766 NERC Research Centres, Services and Facilities 153,866

2,832 2,639 Grants and Contracts to CCLRC 2,444

101,045 135,235 Grants and contracts for Research in Universities and Other Bodies 118,491

93,893 124,857 a) Current 105,9913,083 7,878 b) Capital (excluding JIF) 10,0004,069 2,500 c) Joint Infrastructure Fund (JIF) 2,500

20,458 23,480 Postgraduate Training Awards 25,794




25,386 32,348 Centres/Surveys, Services and Facilities 35,335


Financed by:



13,105 12,717 a) Commissions from Government Departments 11,9705,205 5,026 b) Commissions from the EU 4,365

11,623 20,066 c) Other Commissions 18,0111,376 2,708 d) From Other Councils for Joint Services 1,031

11,488 7,033 e) Other Receipts 7,1874,069 2,500 f) Joint Infrastructure Fund (including HEFCE contributions) 2,500

44 Capital Receipts 566

Transfer To Reserves

341,545 394,947 Total 395,356



207


Particle Physics and Astronomy Research Council

All in £000s

2003/04 2004/05 2005/06


Provision

Gross Expenditure

5,310 5,702 Administration (including joint services) 5,461

1,884 1,226 Restructuring 1,074

20,384 16,451 Council Institutes and Establishments 14,343

34,275 38,526 Grants and Contracts to Other Research Bodies – including 43,602

CCLRC & CERN


49,547 56,496 a) Current 56,6469,740 14,153 b) Joint Infrastructure Fund (including HEFCE contributions) 347,454 8,667 c) Capital 8,945

13,202 14,637 Postgraduate Training Awards 16,593


24,404 14,549 Other Expenditure on Research 20,047




Financed by:

286,745 307,566 Departmental Expenditure Limit 293,677

Estimated International Compensation 24,500


21,546 19,627 External income (including Joint Infrastructure Fund and HEFCE 13,734contributions)


308,398 327,193 Total 332,011



208


Council for the Central Laboratory of the Research Councils

All in £000s

2003/04 2004/05 2005/06


Provision

Gross Expenditure

165,360 180,224 Programme and Facility Operating Costs 177,150


20,663 19,429 Capital Expenditure 19,853


Financed by:


67,035 73,637 Current receipts 66,154

38,336 46,642 a) Research Councils 41,1774,690 4,521 b) Other Government Departments 3,688

24,009 22,474 c) Other sources 21,289

Capital receipts

186,023 199,653 Total 197,003

Note

2003/04Resource/Capital Budget includes EU DEL at current limit of £1,695kProg & Facility costs includes losses on disposal of assets; capital expenditure is offset by NBV of assets disposed of.Capital expenditure is net of funding from RC's and non-PGIA sourcesResource/Capital Budget includes impact of profit/loss on sale of assets and the NBV of sold assets, so by definition also includescapital receiptsExcludes Diamond costs and CCLRC’s shareholder role in DLS. Does include work undertaken by CCLRC for DLS.Resource/Capital Budget for 2003/04 excludes adjustments for deferrals in (+£6909k) and out (-£2,829k) of the year (EYF)

2004/05 and 2005/06Taken from planning figures, excluding Large facilities funding, as advised by OSTResource/capital budget includes EU DEL at £1,695kExcludes Diamond costs and CCLRC’s shareholder role in DLS. Does include work undertaken by CCLRC for DLS.Resource/Capital Budget assumes that deferrals in and out of the year will net to zero.Capital Expenditure and Resource/Capital Budget exclude Target Station2 and 4GLS



209

210

Annex B4

Research Council’s Long Term Projects


Biotechnology and Biological Sciences Research Council1

£000s (at 2004/05 prices)

Current estimate of expenditure

Year of start/ Current estimate Original Estimated To be spent

of year of estimate of Spend in provision in future

Project completion expenditure past years in 2004/05 years Total

I Research Institutes

(a) Land and Buildings

Schemes in progress on 1 April 2005

Institute for Animal HealthPirbright Redevelopment 2003/04 2009/10 27,000 500 1,869 24,631 27,000

John Innes CentreGenome Centre/Glasshouses 2003/04 2005/06 1,500 0 0 1,500 1,500Cell Biology 2005/06 2005/06 4,500 0 0 4,500 4,500

Schemes costing less than £400,000 7,451

(b) Plant, Machinery etc

Items costing less than £400,000 3,454

I Total 500 1,869 41,536

II BBSRC Office


Schemes costing less than £400,000 0

(b) Plant, Machinery etc

Items costing less than £400,000 400

II Total 400

Gross Total 41,936

Less:Capital Receipts Sale of Land and Buildings 9,600

Net total 32,336

1 Figures in this table are based on projected and outturn cash prices, deflated to 2004-2005 prices using the GDP deflator.

Long-term Research Council capital projects – details of work services costing

over £400,000 and reconciliation with the EstimatesTable B4

Medical Research Council1

£000s (at 2004/05 prices)



original estimate of of year of estimate of Spend in provision in future

Project year of completion completion expenditure past years in 2004/05 Total

a) Land and buildings

Schemes costing > £400,000 and in progress at 1 April 2001Island site – Dunn building 1994/95 1997/98 Completed 1999 9,700 9,244 Project completed 9,244.49Island site – P1 refurb 1998/99 2000/01 Completed 2000 2,695 2,617 Project completed 2,616.87Island site – P2 refurb2 1998/99 2001/02 Completed 2000 5,725 7,020 Project completed 7,019.56Accommodation for HNR 1998/99 2001/02 Completed 2001 1,950 1,950 Project completed 1,950.00CBSU extension 1998/99 2000/01 Completed 2001 2,100 2,178 Project completed 2,177.69SPF building – NIMR 2000/01 2002/03 Completed Feb 2005 2,400 2,209 Project completed 2,209.46Animal house – Harwell MLC3 2000/01 2003/04 Completed Jun 2005 18,100 17,200 900 Project completed 18,100.00Canterbury 4 2000/01 2003/04 Completed 2004 3,175 3,175 Project completed 3,175.00NIMR building projects 2001/02 2001/02 Completed 2004 1,260 1,117 100 Project completed 1,217.06Nicotera – Toxicology 2001/02 2002/03 Completed 2004 528 489 Project completed 488.54LMB lecture theatre 2001/02 2002/03 Completed 2002 2,500 2,505 Project completed 2,504.97HIU Building, Oxford 2003/04 2003/04 Completed Jan 2005 500 500 Project completed 500.00London Units – Freezer store project 2003/04 2005/06 Completed 2004 590 100 475 Project completed 575.00HGU East Wing refurb – Phase IV2 2003/04 2005/06 Completed Feb 2005 1,270 500 740 Project completed 1,240.00NIMR Physical Biochemistry 2003/04 2005/06 end 2005 660 240 395 268 903.45IHR Animal House Refurb 2003/04 2005/06 end 2006 1,630 150 1,380 43 1,572.70EEU – Temparaty accommodation 2003/04 2004/05 Completed Jan 2005 500 170 310 Project completed 480.00EEU – CIDEM Accommodation 2004/05 2005/06 2006/07 6,500 25 700 5,945 6,670.00CSC – Animal facility 2004/05 2006/07 Dec 2006 10,000 1,700 6,674 8,374.00HRSU – contribution to new accommodation 2005/06 2006/07 Jun 2005 3,000 0 3,0003,000.00LMB – ARES animal facility 2004/05 2007/08 end 2007 23,500 200 2,585 21,073 23,857.90CBSU – new fMRI building & machine 2004/05 2006/07 2006/07 1,941 328 1,613 1,941.20Gambia – refurb at Fajara 2003/04 2006/07 Jan 2007 2,663 322 2,341 2,663.00Harwell – purchase of lease 2005/06 2005/06 2005/06 3,000 0 2,827 2,826.56LMB – MARS 2003/04 2007/08 end 2007 50,000 150 350 50,075 50,575.15

Total (Schemes costing > £400,000) 155,887 54,089 7,935.0 93,859 155,883

Schemes costing < £400,000 2008

b) Plant and machinery and permanent equipment

Items costing > £400,000 10395Items costing > £400,000 0

Total 106262

Less receipts from the sale of assets 50

Net total 106212

Notes:1 Figures in this table are based on projected and outturn cash prices deflated to 2004/05 prices using the GDP deflator2 Some of the above costs may be recovered from the building contractors (As third parties will be using the space that we have

created/refurbished they have contributed towards the cost of building. This contribution reduces the cost of our asset and applies to IslandSite Phase 2, (University of Cambridge contribution) and HGU East Wing refurb – Phase IV (University of Edinburgh contribution)

3 Full costs and tenure of build now included, plus since latest report, initial equipment costs4 Earlier statements show MRC costs plus funds from other bodies; this statement shows MRC costs only

Long-term capital projects - details of work services costing over £400,000

and reconciliation with the estimatesTable B4


211

Natural Environment Research Council1

£000s (at 2004/05 prices)



original estimated of year of estimate of Spend in provision in future

Project year of completion completion expenditure past years in 2004/05 years Total


CEH Lancaster Project Phase 1&2 2000/01 2004/05 2004/05 10,265 11,515 1,251 0 12,766CEH Restructuring 2002/03 2005/06 2005/06 4,463 222 1,560 8,528 10,310POL/Liverpool Project 2001/02 2003/04 2004/05 4,248 5,635 358 0 5,993Rothera 2005/06 2007/08 2007/08 3,600 0 0 3,452 3,452Bonner Laboratory replacement, Antarctica 2002/03 2003/04 2004/05 3,165 3,388 50 0 3,438New Antarctic Base – Halley 6 2003/04 2005/06 2006/07 23,069 14 1,000 22,102 23,116

Items costing less than £400,000 367

(a) Total 4,586 34,082

(b) Plant and Machinery

ERMS 2004/05 2005/06 2005/06 3,000 0 2,370 614 2,984RMS 2004/05 2004/05 2004/05 900 0 900 0 900SOC NMEP Mixed Mooring Equipment 2004/05 2004/05 2004/05 763 0 763 0 763SOC Upgrading TOBI 2005/06 2005/06 2005/06 746 0 0 728 728

Items costing less than £400,000 0 12,295

(b) Total 4,033 13,637

c) Ships & Aircraft

Replacement for RRS Charles Darwin 2003/04 2007/08 2007/08 39,500 424 9,831 28,104 38,359

c) Total 9,831 28,104

Gross Total 18,450 75,823

Less:Sales of assets (Capital Income) 0 566

Net Total 18,450 75,257

1 Figures in this table are based on projected and outturn cash prices deflated to 2004/05 prices using the GDP deflator.


over £400,000 and reconciliation with the estimatesTable B4


212

Council for the Central Laboratory of the Research Councils1

£000s (at 2004/05 prices)



original estimate of of year of estimate of Spend in provision in future



Schemes costing more than £400,000and in progress at 1 April 2004

R55 Extension 2000/01 2003/04 2003/04 1366 1366 40 0 1,406F&G Block 2000/01 2003/04 2003/04 832 796 0 0 796New RAL Nursery 2002/03 2003/04 2003/04 670 670 0 0 670Temporary Offices 2002/03 2003/04 2003/04 561 561 0 0 561R76 Temporary Accommodation 2002/03 2003/04 2004/05 773 692 10 0 702Warehouse Style Building 2002/03 2004/05 2004/05 4,500 3,468 750 0 4,218TST2 Buildings 2003/04 2006/07 2007/08 26,374 0 3,000 27,000 30,000User Visitor Centre 2002/03 2004/05 2004/05 1,800 854 960 0 1,814

Schemes costing less than £400,000

Various Various Various Various 0 400 400

(a) Total 5,160

(b) Plant and Machinery and permanent equipmentItems costing more than £400,000

2nd Harmonic 1997/98 2005/06 2005/06 9,500 8,533 880 0 9,413GEM 1997/98 2003/04 2003/04 3,500 3,423 0 0 3,423RFQ inc ESS 1997/98 2004/05 2004/05 5,000 4,918 280 0 5,198Vulcan Upgrade 1999/00 2003/04 2003/04 3,496 3,628 0 0 3,628Engin X 1999/00 2003/04 2003/04 2,442 2,198 0 0 2,198Vesuvio 1999/00 2003/04 2003/04 466 466 0 0 466Rapid 2 1999/00 2003/04 2003/04 1,243 1,240 0 0 1,24012.1 Upgrade 1999/00 2003/04 2003/04 1,499 1,499 0 0 1,499SXD11 2000/01 2003/04 2003/04 951 951 0 0 951Beamline 11 2000/01 200405 2004/05 1,452 1,371 0 0 1,371Klystron 2001/02 2003 04 2003/04 876 877 0 0 877Refurbishment of Computer Hall 2002/03 2003/04 2004/05 1,597 1,633 0 0 1,633Helium 3 Facility 2001/02 2004/05 2005/06 700 569 120 0 689Merlin Spectrometer 2001/02 2005/06 2005/06 4,900 1,112 2,500 1,288 4,900Cryogenics Upgrade 2002/03 2003/04 2003/04 753 634 0 0 634SRS Variable Polarisation 2002/03 2005/06 2005/06 417 354 195 0 549Target Station 2 2002/03 2008/09 2008/09 67,889 5,851 14,400 95,149 115,400Auto PX Camera 2002/03 2004/05 2004/05 519 519 0 0 5194GLS 2003/04 2006/07 2006/07 11,500 1,987 4,580 4,933 11,500MICE 2003/04 2006/07 2008/09 10,000 0 500 9,500 10,000Beamline 10 2001/02 2005/06 2004/05 3,500 3,282 235 0 3,517Gas Distribution Network 2002/03 2004/05 2004/05 3,500 1,752 1,750 0 3,502DL Heating 2003/04 2004/05 2004/05 1,480 104 1,380 0 1,484FEND 2003/04 2004/05 2005/06 482 235 190 50 475Hotwax 2003/04 2005/06 2005/06 485 142 220 130 492Sandals 2004/05 2005/06 2005/06 600 0 570 30 600MIRI 2004/05 2006/07 2006/07 500 0 280 220 500Pet Gamma 2003/04 2007/08 2007/08 1,043 124 360 560 1,044Gemini 2004/05 2007/08 2007/08 3,500 0 300 3,200 3,500X Ray imaging 2004/05 2007/08 2007/08 565 0 200 365 565Items costing less than £400,000Various Various Various Various 850 1,000 0 1,850

(b) Total 29,940

Gross Total 35,100less:Receipts from the sale of assets 206

Net total 29,734

1 Figures in this table are based on projected and outturn cash prices deflated to 2004/05 prices using the GDP deflator


over £400,000 and reconciliation with the estimates (continued)Table B4


213

Particle Physics and Astronomy Research Council1

£000s (at 2004/05 prices)



Original estimated of year of estimate of Spend in provision in future


(a) Land and Buildings:

UK Astronomy Technology Centre building 2003/04 2004/05 401 4,000 1,948 1,983 45 3,976

Items costing less than £400,000 0 0(b) Plant and Machinery 0Items costing less than £400,000 3,751 3,751

Total 5,734

less:Capital Receipts 100Sale of Plant and Machinery

Net total 5,634

1 Figures in this table are based on projected and outturn cash prices deflated to 2004-05 prices using the GDP deflator. Original estimate is notadjusted.

Long-term capital projects – details of work sevices costing over £400,000

and reconciliation with the EstimatesTable B4


214

215

Annex B5

Non-Departmental PublicBodies


Listed below are those Non-DepartmentalPublic Bodies (NDPBs) sponsored by theDepartment of Trade and Industry1. Details ofthe amount of grant in aid given to thesebodies (where appropriate) can be found intables B1 and B3 (Science Budget). Furtherinformation on NDPBs can be found atwww.civilservice.gov.uk

Executive Bodies

Advisory, Conciliation and Arbitration Service(ACAS)

British Hallmarking Council

Coal Authority

Consumer Consultative Bodies:

▼ Consumer Council for Postal Services(Post watch)

▼ Gas and Electricity Consumer Council(Energy watch)

▼ National Consumer Council

Competition Commission

Competition Service

Design Council

Equal Opportunities Commission

Hearing Aid Council

Nuclear Decommissioning Authority (formalcommencement of operations 1 April 2005)

Research Councils:

▼ Biotechnology and Biological SciencesResearch Council (BBSRC)

▼ Council for the Central Laboratory of theResearch Councils (CCLRC)

▼ Economic and Social Research Council(ESRC)

▼ Engineering and Physical SciencesResearch Council (EPSRC)

▼ Medical Research Council (MRC)

▼ Natural Environment Research Council(NERC)

▼ Particle Physics and Astronomy ResearchCouncil (PPARC)

Regional Development Agencies

▼ Advantage West Midlands

▼ East Midlands Regional DevelopmentAgency

▼ East of England Development Agency

▼ North West Regional DevelopmentAgency

▼ One North East

▼ South East England Development Agency

▼ South West England Development Agency

▼ Yorkshire Forward

Simpler Trade Procedures Board (SITPRO)

United Kingdom Atomic Energy Authority

1 Information as at 2 February 2005


216

Advisory Bodies

Advisory Committee on Carbon AbatementTechnologies

Aerospace Committee (closed August 04)

Agriculture and Environment BiotechnologyCommission

Business Incubation Fund Investment Panel(closed February 05)

Council for Science and Technology

Distributed Generation Co-ordinating Group(closed November 2004)

Ethnic Minority Business Advisory Forum

Fuel Poverty Action Group

Industrial Development Advisory Board

Intellectual Property Advisory Committee

Low Pay Commission

Measurement Advisory Committee

Regional Industrial Development Boards

Renewables Advisory Board

Small Business Council

Small Business Investment Task Force

Sustainable Energy Policy Advisory Board

Technology Strategy Board (started September 04)

UK National Authority Advisory Group

Women’s National Commission

Tribunals

Central Arbitration Committee

Competition Appeal Tribunal

Copyright Tribunal

Employment Appeal Tribunal

Employment Tribunals

Insolvency Practitioners' Tribunal

Persons Hearing Consumer Credit LicensingAppeals

Persons Hearing Estate Agents Appeals

EXPENDITURE PLANS

The following table shows the gross administrative expenditure funded by the DTI for the largerexecutive NDPBs and tribunals. “Larger” means here a body which has 25 or more staff andwhich normally relies on Government grant or grant-in-aid for 50% or more of its income, ortrades mainly with OGDs. In the case of the Research Councils (RCs), the figures represent theirtotal running costs and include expenditure on research undertaken at their institutes. The RCs’figures are net figures. They therefore exclude expenditure on research work commissioned byGovernment departments, the EU, etc, and the private sector.£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08

Outturn Outturn Outturn Outturn Outturn Working Plans Plans Plans

Provision

SCIENCE NDPBs

BBSRC

Service Providers 60.20 64.40 71.20 72.30 72.50 74.90 76.30 78.70 81.90Policy Advisers 1.00 1.00 1.00 1.00 1.30 1.40 1.50 1.60 1.70Support and Ohs 3.80 3.80 3.80 3.90 4.20 4.40 4.50 4.70 4.90Total 65.00 69.20 76.00 77.20 78.00 80.70 82.30 85.00 88.50

ESRC


EPSRC

Service Providers1 17.10 21.00 21.50 27.20 38.05 21.85 23.15 23.29 23.44 Policy Advisers 2.20 2.20 2.40 2.50 4.52 5.39 4.95 4.95 4.95 Support and Ohs 8.10 6.00 7.10 7.50 6.02 6.67 7.08 7.08 7.08 Total 27.40 29.20 31.00 37.20 48.59 33.91 35.18 35.32 35.47

MRC

Service Providers 109.40 122.00 123.54 132.10 152.86 170.10 169.03 169.25 179.53 Policy Advisers 6.10 6.90 6.94 7.42 8.59 9.56 9.50 9.51 10.09 Support and Ohs 7.40 8.20 8.30 8.91 10.30 11.47 11.40 11.41 12.10 Total 122.90 137.10 138.78 148.43 171.75 191.13 189.93 190.17 201.72

NERC


PPARC


CCLRC2

Service Providers 2.55 17.26 17.56 19.53 20.93 20.93Policy Advisers 0.15 0.13 0.35 0.36 0.38 0.38Support and Ohs – – – – Total 2.70 17.39 17.91 19.89 21.31 21.31

AHRC3

Service Providers 1.25 1.28 1.31Policy Advisers 0.65 0.67 0.68Support and Ohs 2.87 2.94 3.02Total – – 4.77 4.89 5.01

TOTAL SCIENCE 353.70 387.80 397.78 422.63 491.01 505.80 539.24 552.92 579.76

1 Since 1998/99 some payments to CCLRC relating to Research grants to HEIs have been excluded from here and included as part of the grants2 Prior to 2003/-04 most of CCLRC’s government funding came through the other RCs. From 2003/04 it was decided to fund CCLRC directly3 AHRC (Arts and Humanities Research Council) is a new body starting on 1 April 2005


217

NON SCIENCE NDPBs

ACAS1


Coal AuthorityService Providers 1.90 1.90 1.90 2.40 3.00 4.00 4.50 4.60 4.90Policy Advisers 0.40 0.40 0.60 0.60 0.60 0.70 0.70 0.70 0.80Support and Ohs 2.30 2.20 2.50 3.10 3.90 4.60 5.60 5.50 5.80Total 4.60 4.50 5.00 6.10 7.50 9.30 10.80 10.80 11.50

Design CouncilService Providers 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Policy Advisers 6.80 7.70 6.30 5.10 4.90 3.90 3.90 3.60 3.60Support and Ohs 1.60 1.70 1.80 1.50 1.60 2.70 2.70 2.40 2.40Total 8.40 9.40 8.10 6.60 6.50 6.60 6.60 6.00 6.00

Equal Opportunities Commission2

Service Providers 2.60 2.40 2.00 2.43 2.53 2.89 3.32 3.32Policy Advisers 0.60 0.80 1.00 1.22 1.29 1.34 1.54 1.54Support and Ohs 3.60 5.20 5.80 3.70 3.10 3.71 3.83 3.83Total 6.80 8.40 8.80 7.35 6.92 7.94 8.69 8.69

Gas Consumers’ Council3

Service Providers 1.80 1.10Policy Advisers 0.10 0.10Support and Ohs 1.60 0.90Total 3.50 2.10

Gas and Electricity Consumer Council4

Service Providers 8.50 8.30 8.50 9.20 8.60 8.30 8.30Policy Advisers 0.20 0.50 0.50 0.50 0.50 0.50 0.50Support and Ohs 3.30 3.20 3.40 3.57 3.60 3.20 3.20Total 5.60 12.00 12.00 12.40 13.27 12.70 12.00 12.00

National Consumer CouncilService Providers 1.10 2.10 1.40 0.00 0.00 0.00 0.00 0.00 0.00Policy Advisers 0.20 0.20 1.10 1.90 1.60 1.43 1.90 1.68 1.68Support and Ohs 1.20 1.50 2.00 1.50 2.30 2.40 1.93 1.74 1.74Total 2.50 3.80 4.50 3.40 3.90 3.83 3.83 3.42 3.42

Consumer Council for Postal Services5

Service Providers 3.00 2.54 3.52 3.56 3.24 4.37 4.41Policy Advisers 4.49 3.69 3.90 3.70 3.60 4.00 4.00Support and Ohs 2.00 1.96 2.87 3.00 3.00 3.20 3.20Total 1.20 9.49 8.19 10.29 10.26 9.84 11.57 11.61

Competition CommissionService Providers 4.90 5.30 5.40 10.60 17.60 17.90 17.90 17.90 17.90Policy Advisers 0.00 0.00 0.00 1.00 0.50 0.50 0.50 0.50 0.50Support and Ohs 3.20 3.40 4.30 7.70 4.60 4.60 4.60 4.60 4.60Total 8.10 8.70 9.70 19.30 22.70 23.00 23.00 23.00 23.00

UKAEA6


NDA7

Service providers 0.00 29.30 29.30 29.30Policy Advisors 1.10 3.25 3.25 3.25Support and Ohs 13.55 7.30 7.30 7.30Total 14.65 39.85 39.85 39.85

1 ACAS figures exclude the costs of the Central Arbitration Committee, a tribunal NDPB2 The EOC will form part of the larger Commission for Equality and Human Rights (CEHR) to be established in 2007/8. No budgets are available yet

for this body. 3 The Gas Consumers’ Council was abolished November 2000. Its work was taken over by the Gas and Electricity Consumer Council4 The Gas and Electricity Consumer Council was established in November 2000. The figures for 2006/07 & 2007/08 are estimates as indicative

budgets have not yet been agreed5 The Consumer Council for Postal Services 2001/02 figures are for 15 months ending March 2002 and include set up costs.

Please note figures for 2006/07 & 2007/08 are estimates, as indicative budgets have not yet been agreed 6 Note that figures for 2005/06 reflect changes resulting form the Energy Act 2004, namely separation of the constabulary from UKAEA to a new Civil

Nuclear Police Authority, and closer matching of central resources to clean up activities at nuclear sites.Financial figures for CNPA which commences on 1 April 2005 will be shown in next year’s Annual Report

7 The NDA expenditure in 2004/05 covered set up costs as a new body. The NDA became fully operational on 1 April 20058 Figures for non-science bodies for 2005/06 onwards are indicative.

£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08


Provision


218

Regional Development Agencies9

Advantage West Midlands 9.20 8.00 9.30 10.20 17.60 16.50 16.91 17.34 17.77East Midlands Development Agency 8.20 7.20 6.90 8.10 14.00 10.10 10.35 10.61 10.88East of England Development Agency 4.40 4.70 6.20 12.20 8.20 18.00 18.45 18.91 19.38North West Development Agency 21.50 14.10 19.00 27.80 39.30 40.20 41.21 42.24 43.29One North East 17.30 10.50 11.60 18.40 17.60 20.70 21.22 21.75 22.29South East of England Development Agency 6.80 6.10 3.30 13.50 16.20 16.40 16.81 17.23 17.66South West of England Development Agency 10.40 8.00 9.00 9.60 15.20 12.10 12.40 12.71 13.03Yorkshire Forward 12.10 8.30 10.80 12.30 18.00 18.50 18.96 19.44 19.92Total 89.90 66.90 76.10 112.10 146.10 152.50 156.31 160.23 164.22

TOTAL NON SCIENCE 187.20 178.90 205.89 253.84 304.01 326.05 350.62 346.56 341.20

9 The Regional Development Agencies were formed in April 1999. No breakdown of the figures is available.From 2002/03 onwards the RDA’s administration costs form part of the new single budget arrangements. The RDAs will submitproposals for their administration costs to the Secretary of State for Trade and Industry in their Corporate Plans.2004/05 figures are based on their forecast outturn returns as at December 2004. The figures for 2005/06 onwards are based on2004/05 with an allowance for inflation. Firm figures for these years were not available when the report was compiled.

£ million 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08


Provision


219

220

Annex B6

Senior Civil Service Salaries

Pay Range Number of SCS staff

within the Range @ 1.4.04

Below £50,000 0

£50,000 – £54,999 5

£55,000 – £59,999 24

£60,000 – £64,999 26

£65,000 – £69,999 43

£70,000 – £74,999 27

£75,000 – £79,999 29

£80,000 – £84,999 19

£85,000 – £89,999 5

£90,000 – £94,999 15

£95,000 – £99,999 9

£100,000 – £104,999 3

£105,000 – £109,999 2

£110,000 – £114,999 3

£115,000 – £119,000 3

£120,000 – £124,999 1

£125,000 – £129,999 0

£130,000 – £134,999 0

£135,000 – £139,999 1

£140,000 – £144,999 0

£145,000 – £149,999 1

£150,000 – £154,999 1

221

Annex B7

DTI Public Appointments

Body/ Position Period of Current Remuneration Time Input

Name of appointee Appointment (£ pa) (days pa)

Advantage West Midlands

Gerard Coyne Member 14/12/2004 – 13/12/2007 7,931 24

Isabella Moore Member 14/12/2004 – 13/12/2007 7,931 24

Sue Prince Member 14/12/2004 – 13/12/2007 7,931 24

Diane Rayner Member 14/12/2004 – 13/12/2007 7,931 24

Athelston Sealey Member 14/12/2004 – 13/12/2007 7,931 24

Advisory Conciliation and Arbitration Service

Sarah Anderson Member 01/05/2004 – 30/04/2007 1,505 20

William Coupar Member 01/05/2004 – 30/04/2007 1,505 20

John Cridland Member 01/05/2004 – 30/04/2007 1,505 20

Veronica McDonald Member 01/05/2004 – 30/04/2007 1,505 20

John McMullen Member 01/05/2004 – 30/04/2007 1,505 20

Dave Prentis Member 01/05/2004 – 30/04/2007 1,505 20

John Steele Member 01/05/2004 – 30/04/2007 1,505 20

Sarah Veale Member 01/05/2004 – 30/04/2007 1,505 20

Biotechnology and Biological Sciences Research Council

Simon Bright Member 20/04/2004 – 31/03/2006 6,120 25

Monica Darnbrough Member 01/04/2004 – 31/03/2006 0 25

David Delpy Member 01/04/2004 – 31/03/2007 6,120 25

Ann Hunter Member 01/04/2004 – 31/03/2007 6,120 25

British Hallmarking Council

Peter Atkinson Member 01/01/2004 – 31/12/2006 0 3

Fod Barnes Member 01/01/2004 – 31/12/2006 0 3

Linda Campbell Member 18/02/2004 – 31/12/2006 0 3

Peter Clapham Member 01/01/2004 – 31/12/2006 0 3

Mike Drewry Member 18/02/2004 – 31/12/2006 0 3

John Evans Member 01/01/2004 – 31/12/2006 0 3

Adam Green Member 01/01/2004 – 31/12/2006 0 3

Thomas Murray Chair 11/03/2004 – 31/12/2006 12,000 10

Martyn Pugh Member 18/02/2004 – 31/12/2006 0 3

Zoe Simpson Member 01/01/2004 – 31/12/2006 0 3

Stefan Waclawski Member 18/02/2004 – 31/12/2006 0 3

British Nuclear Fuels plc

Gordon Campbell Chair 01/06/2004 – 31/03/2007 165,000 100

Brian George Member 31/03/2004 – 31/03/2005 25,000 24

Gail De Planque Member 31/03/2004 – 31/03/2005 25,000 24

Richard Stone Member 31/03/2004 – 31/03/2005 25,000 24

Business Incubation Fund Investment Panel

Paul Bradstock Member 01/01/2004 – 28/02/2005 0 2

Patrick Umeh Member 01/01/2004 – 28/02/2005 0 2

Central Arbitration Committee

Paul Davies Deputy (Chair) 01/04/2004 – 31/03/2007 9,648 24

Linda Dickens Deputy (Chair) 01/09/2004 – 31/08/2007 9,648 24

John Goodman Deputy (Chair) 05/01/2004 – 04/01/2007 9,648 24

Kenneth Miller Deputy (Chair) 01/04/2004 – 31/03/2007 9,648 24

Coal Authority

John Harris Chair 01/09/2004 – 30/09/2007 39,632 96

Competition Commission

Christopher Clarke Deputy (Chair) 01/09/2004 – 09/09/2010 90,816 208

Paul Geroski Chair 11/05/2004 – 31/12/2009 150,000 260

Diana Guy Deputy (Chair) 01/09/2004 – 30/11/2010 90,816 208

Patricia Hodgson Member 01/01/2004 – 31/12/2008 350 per day 15

Consumer Council for Postal Services

Moi Ali Member 01/01/2004 – 31/12/2006 6,300 30

Diane Bailey Member 01/01/2004 – 31/12/2005 6,300 30

Tom Begg Regional Chair 01/01/2004 – 31/12/2006 31,442 150

Helen Anne Charlton Member 01/01/2004 – 31/12/2006 6,300 30

Kay Dixon Regional Chair 01/01/2004 – 31/12/2005 31,442 150

Judith Donovan Regional Chair 01/01/2004 – 31/12/2005 31,442 150

Charles Howeson Regional Chair 01/01/2004 – 31/12/2006 31,442 150

Eifion Pritchard Regional Chair 01/01/2004 – 31/12/2005 25,563 100

John Ward Regional Chair 01/01/2004 – 31/12/2006 31,442 150

Council for Science and Technology

John Beringer Member 01/03/2004 – 01/03/2007 0 10

Geoffrey Boulton Member 01/03/2004 – 01/03/2007 0 10

Janet Finch Member 01/03/2004 – 01/03/2007 0 10

Andrew Gould Member 01/03/2004 – 01/03/2007 0 10

Wendy Hall Member 01/03/2004 – 01/03/2007 0 10

Hermann Hauser Member 01/03/2004 – 01/03/2007 0 10

Dieter Helm Member 01/03/2004 – 01/03/2007 0 10

Alan Hughes Member 01/03/2004 – 01/03/2007 0 10

Susan Ion Member 01/03/2004 – 01/03/2007 0 10

Robert Margetts Member 02/03/2004 – 01/03/2007 0 10

Paul Nurse Member 01/03/2004 – 01/03/2007 0 10

Keith Peters Chair 01/03/2004 – 01/03/2007 0 24

Krishnamurthy Rajagopal Member 01/03/2004 – 01/03/2007 0 10

Michael Sterling Member 01/03/2004 – 01/03/2007 0 10

Katherine Sykes Member 01/03/2004 – 01/03/2007 0 10

Mark Walport Member 01/03/2004 – 01/03/2007 0 10

Council for the Central Laboratory of the Research Councils

John Burrows Member 01/04/2004 – 31/03/2008 6,120 20

Stephen Dexter Member 01/04/2004 – 31/03/2005 6,120 20

Robert John Donovan Member 01/04/2004 – 31/03/2008 6,120 20

Design Council

Hamish Bryce Member 31/12/2004 – 31/12/2005 0 16

George Cox Chair 01/10/2004 – 31/12/2008 0 16

Peter Davies Member 01/01/2004 – 31/12/2004 0 16

Penny Egan Member 31/12/2004 – 31/12/2005 0 16

Valerian Freyberg Member 01/01/2004 – 31/12/2004 0 16

John Hazelwood Member 01/01/2004 – 31/12/2005 0 16

Roger Lyons Member 01/01/2004 – 31/12/2004 0 16

Aliastair Macdonald Member 01/01/2004 – 31/12/2004 0 16

Richard Seymour Member 01/01/2004 – 31/12/2004 0 16


222



Eastern Region Industrial Development Board

Alan Davies Member 01/01/2004 – 31/12/2006 0 12

Sian Fytche Member 01/08/2004 – 31/07/2007 0 12

Keith Hamilton Member 01/01/2004 – 31/12/2006 0 12

Geoff Lambert Member 01/08/2004 – 31/07/2007 0 12

Marilyn Martin Member 01/08/2004 – 31/07/2007 0 12

East Midlands Development Agency

Steve Brown Member 14/12/2004 – 13/12/2007 7,931 24

Jonathan Collins Member 14/12/2004 – 13/12/2007 7,931 24

Samantha Gemmell Member 14/12/2004 – 13/12/2007 7,931 24

Gary Hunt Member 14/12/2004 – 13/12/2007 7,931 24

Bryan Jackson Chair 14/12/2004 – 13/12/2007 49,854 104

Jonathan McLeod Member 14/12/2004 – 13/12/2007 7,931 24

Rita Patel Member 14/12/2004 – 13/12/2007 7,931 24

Peter Ramsden Member 14/12/2004 – 13/12/2007 7,931 24

Geoffrey Stevens Member 14/12/2004 – 13/12/2007 7,931 24

Philip Tasker Member 14/12/2004 – 13/12/2007 7,931 24

Ross Willmott Member 28/07/2004 – 13/12/2005 7,931 24

East of England Development Agency

Paul Burall Member 14/12/2004 – 13/12/2007 7,931 24

Celia Cameron Member 14/12/2004 – 13/12/2007 7,931 24

Marco Cereste Member 14/12/2004 – 13/12/2007 7,931 24

Sheila Childerhouse Member 14/12/2004 – 13/12/2007 7,931 24

Leo Murray Member 14/12/2004 – 13/12/2006 7,931 24

Christopher Paveley Member 14/12/2004 – 13/12/2007 7,931 24

Yasmin Shariff Member 14/12/2004 – 13/12/2006 7,931 24

Economic and Social Research Council

Richard Alison Member 01/08/2004 – 31/07/2007 6,120 20

Patricia Broadfoot Member 01/08/2004 – 31/07/2006 6,120 20

Frances Cairncross Chair 01/04/2004 – 31/03/2007 14,700 24

Andrew Chesher Member 01/08/2004 – 31/07/2005 6,120 20

Paul Johnson Member 01/08/2004 – 31/07/2006 0 20

Andrew Pettigrew Member 21/10/2004 – 20/10/2008 6,120 20

Judith Rees Member 01/08/2004 – 31/07/2007 6,120 20

Stephen Wilks Member 01/08/2004 – 31/07/2005 6,120 20

Engineering and Physical Sciences Research Council

Roy Anderson Member 01/10/2004 – 30/09/2005 0 20

Ann Dowling Member 01/04/2004 – 31/03/2006 6,120 20

David Grant Member 01/04/2004 – 31/03/2006 6,120 20

David H Jordan Member 01/04/2004 – 31/03/2007 6,120 20

Martin J Taylor Member 01/04/2004 – 31/03/2007 6,120 20

Equal Opportunities Commission

Rowena Arshad Commissioner 17/06/2004 – 16/06/2007 1,920 20

Sue Ashtiany Commissioner 01/01/2004 – 31/12/2006 1,920 20

Duncan Fisher Commissioner 01/01/2004 – 31/12/2006 1,920 20

Ethnic Minority Business Forum

Numan Azmi Member 02/07/2004 – 01/07/2005 4,800 24

Gweneth Balson Member 25/02/2004 – 25/02/2006 4,800 24

Susannah Tina Fahm Member 25/02/2004 – 25/02/2006 4,800 24

Leslie Fairclough Member 02/07/2004 – 01/07/2005 4,800 24

Yvonne Field Member 25/02/2004 – 25/02/2006 4,800 24

Peaches Golding Member 25/02/2004 – 25/02/2006 4,800 24


223



Mohamed Isap Member 02/07/2004 – 01/07/2005 4,800 24

Athelston Sealey Member 02/07/2004 – 01/07/2005 4,800 24

Rashid Teladia Member 25/02/2004 – 25/02/2006 4,800 24

Gas and Electricity Markets Authority

Miriam Greenwood Member 24/05/2004 – 23/05/2007 20,000 36

Jayne Scott Member 24/05/2004 – 23/05/2007 20,000 36

John Wybrew Member 24/05/2004 – 23/05/2007 20,000 36

Gas and Electricity Consumer Council

Ed Gallagher Chair 01/04/2004 – 31/03/2007 37,500 100

Hearing Aid Council

Gerald Armstrong-Bednall Member 30/04/2004 – 31/12/2007 4,725 25

Michael Bishop Member 16/04/2004 – 31/12/2007 4,725 25

Anthony Corcoran Member 01/01/2004 – 31/12/2006 2,560 20

John Irwin Member 01/01/2004 – 31/12/2006 2,560 20

Maryanne Maltby Member 03/04/2004 – 31/12/2007 4,725 25

Peter Ormerod Member 01/01/2004 – 31/12/2006 2,560 20

Industrial Development Advisory Board

Michael Beverley Member 01/01/2004 – 31/12/2006 0 12

Brian Morrison Count Member 01/10/2004 – 30/09/2007 0 12

Karen Elisabeth Jones Member 01/10/2004 – 30/09/2007 0 12

Gordon Page Member 01/01/2004 – 31/12/2006 0 12

London and South East Regional Industrial Development Board

Praful Davda Member 01/02/2004 – 31/01/2007 0 12

Wendy Hyde Member 01/08/2004 – 31/07/2007 0 12

Shahzad Khan Member 01/08/2004 – 31/07/2007 0 12

Mei Sim Lai Member 01/08/2004 – 31/07/2007 0 12

Robert Stiles Member 01/02/2004 – 31/01/2007 0 12

Low Pay Commission

Ian Brinkley Member 01/08/2004 – 31/07/2007 2,460 6

William Brown Member 01/11/2004 – 31/10/2007 2,460 6

John Cridland Member 01/11/2004 – 31/10/2007 2,460 6

Paul Gates Member 01/11/2004 – 31/10/2007 2,460 6

Ian Hay Member 01/11/2004 – 31/10/2007 2,460 6

David Metcalf Member 01/11/2004 – 31/10/2007 2,460 6

Margaret Prosser Member 01/11/2004 – 31/10/2005 2,460 6

Measurement Advisory Committee

Penny Allisy-Roberts Member 01/07/2004 – 30/06/2007 0 5

Medical Research Council

Ernest McAlpine Armstrong Member 01/08/2004 – 31/03/2008 0 25

Sally Davies Member 01/08/2004 – 31/03/2008 0 25

Carol Dezateux Member 01/08/2004 – 31/03/2008 6,120 25

Ruth Hall Member 01/08/2004 – 31/07/2008 0 25

Andrew J McMichael Member 01/08/2004 – 31/03/2008 8,160 25

Alan North Member 01/08/2004 – 31/07/2006 6,120 25

Generva Richardson Member 01/03/2004 – 29/02/2008 6,120 25

Herbert Sewell Member 01/08/2004 – 31/03/2008 6,120 25

Michael Wakelam Member 01/08/2004 – 31/03/2008 8,160 25

National Consumer Council

Robert Chilton Deputy (Chair) 01/10/2004 – 30/09/2009 13,100 15

Dianne Hayter Member 01/10/2004 – 30/09/2007 10,481 15

Deirdre Hutton Chair 01/01/2004 – 31/12/2006 49,540 150

Christopher Kelly Member 01/10/2004 – 30/09/2009 10,481 15


224



Stephen Locke Member 01/10/2004 – 30/09/2007 10,481 10

Julie Mellor Member 01/10/2004 – 30/09/2009 10,481 15

Julia Unwin Member 01/10/2004 – 30/09/2007 10,481 15

Natural Environment Research Council

Malcolm Anderson Member 01/08/2004 – 31/07/2007 6,120 20

Lesley A Glover Member 01/08/2004 – 31/07/2007 6,120 20

Alexander Norman Halliday Member 22/11/2004 – 31/07/2008 6,120 20

Peter Frank Hazell Member 22/11/2004 – 31/07/2008 6,120 20

Robert Margetts Chair 01/01/2004 – 31/12/2006 14,700 24

North East Industrial Development Board

Paul Donald Bartlett Member 01/01/2004 – 31/12/2006 0 12

Subhash Chaudhary Member 01/01/2004 – 31/12/2004 0 12

William Graham Member 01/08/2004 – 31/07/2007 0 12

Haani Ul Hasnain Member 01/01/2004 – 31/12/2006 0 12

Carol Ann Hunter Member 01/01/2004 – 31/12/2006 0 12

Mike McCullagh Member 01/01/2004 – 31/12/2006 0 12

Rod Taylor Member 01/01/2004 – 31/12/2006 0 12

Kathryn Lucy Winskell Member 01/05/2004 – 30/04/2007 0 12

North West Development Agency

David Brockbank Member 14/12/2004 – 13/12/2007 7,931 24

Martin Harris Deputy (Chair) 14/12/2004 – 13/12/2007 15,861 48

Peter Hensman Member 14/12/2004 – 13/12/2007 7,931 24

Pauleen Lane Member 14/12/2004 – 13/12/2007 7,931 24

John Merry Member 14/12/2004 – 13/12/2007 7,931 24

John Moverley Member 14/12/2004 – 13/12/2007 7,931 24

Anil Ruia Member 14/12/2004 – 13/12/2007 7,931 24

Brenda Smith Member 14/12/2004 – 13/12/2007 7,931 24

Michael Storey Member 14/12/2004 – 13/12/2007 7,931 24

North West Industrial Development Board

William Joseph Mullarkey Member 01/01/2004 – 31/12/2006 0 12

David John Tunnicliff Member 01/09/2004 – 31/08/2007 0 12

Marcus Wood Chair 01/01/2004 – 31/12/2007 0 12

Nuclear Decommissioning Authority

Nick Baldwin Member 29/10/2004 – 31/12/2007 25,000 30

Anthony Cleaver Chair 27/07/2004 – 27/07/2007 80,000 100

Tony Cooper Member 29/10/2004 – 31/12/2007 25,000 30

David Illingworth Member 29/10/2004 – 31/12/2007 25,000 30

Roger Scott Member 29/10/2004 – 31/12/2007 25,000 30

Primrose Stark Member 29/10/2004 – 31/12/2007 25,000 30

Lyndon Stanton Member 29/10/2004 – 31/12/2007 25,000 30

One North East

Tim Cantle-Jones Member 14/12/2004 – 13/12/2005 7,931 24

Christopher Edwards Member 14/12/2004 – 13/12/2007 7,931 24

Jackie Fisher Member 14/12/2004 – 13/12/2007 7,931 24

Geoffrey Hodgson Member 14/12/2004 – 13/12/2007 7,931 24

Raymond Mallon Member 14/12/2004 – 13/12/2007 7,931 24

Jane Nolan Member 14/12/2004 – 13/12/2006 7,931 24

Robert Symonds Member 14/12/2004 – 13/12/2007 7,931 24

Alison Thain Member 14/12/2004 – 13/12/2007 7,931 24

Christopher Thompson Member 14/12/2004 – 13/12/2007 7,931 24

Susan Underwood Member 14/12/2004 – 13/12/2007 7,931 24


225



Particle Physics and Astronomy Research Council

Michael G Edmunds Member 01/04/2004 – 31/03/2007 6,120 15

Jonathan Ellis Member 01/04/2004 – 31/03/2007 6,120 15

Brian Foster Member 01/04/2004 – 31/03/2006 6,120 15

Judith Scott Member 01/04/2004 – 31/03/2006 6,120 15

David Steeds Member 28/09/2004 – 31/03/2006 6,120 15

Postal Services Commission

Simone Bos Commissioner 31/03/2004 – 30/03/2007 15,721 40

Tony Cooper Commissioner 01/06/2004 – 31/05/2007 15,721 40

Nigel Stapleton Chair 15/01/2004 – 14/01/2007 75,000 147

Renewables Advisory Board

Doug Coleman Member 11/10/2004 – 10/10/2007 0 5

Gearoid Lane Member 11/10/2004 – 10/10/2007 0 5

Jason Scagell Member 11/10/2004 – 10/10/2007 0 5

Royal Mail

Margaret Prosser Member 07/10/2004 – 06/10/2007 30,000 11

Simpler Trade Procedures Board

(Anthony) Peter Raynor Member 05/11/2004 – 21/10/2005 0 60

Norman Hunter Rose Deputy (Chair) 06/12/2004 – 31/12/2005 0 60

Alexander W (Sandy) Russell Member 01/12/2004 – 30/12/2005 0 60

Keith White Member 05/11/2004 – 21/10/2005 0 60

Peter Wilmott Member 01/12/2004 – 21/10/2005 0 60

Small Business Council

Simon John Bartley Member 01/09/2004 – 30/06/2006 4,800 24

Sue Brownson Member 01/07/2004 – 30/06/2006 0 24

Paul Harrod Member 01/07/2004 – 30/06/2006 4,800 24

Andrew Ive Member 01/07/2004 – 30/06/2006 4,800 24

John McLaren-Stewart Member 01/07/2004 – 30/06/2006 4,800 24

Ilyas Patel Member 01/07/2004 – 30/06/2006 4,800 24

Sally Preston Member 01/07/2004 – 30/06/2006 4,800 24

Fiona Price Member 01/07/2004 – 30/06/2006 4,800 24

John Reynolds Member 01/07/2004 – 30/06/2006 4,800 24

Michael Robinson Member 01/07/2004 – 30/06/2006 4,800 24

Sean Taggart Member 01/07/2004 – 30/06/2006 4,800 24

Simon Topman Member 01/07/2004 – 30/06/2006 0 24

Jan Ward Member 01/07/2004 – 30/06/2006 4,800 24

Candida Whitmill Member 01/07/2004 – 30/06/2006 4,800 24

Small Business Investment Task Force

David Marsden Member 01/10/2004 – 30/09/2007 0 8

Gordon Murray Member 01/10/2004 – 30/09/2007 4,800 8

Michael Snyder Member 01/10/2004 – 30/09/2007 0 8

South East England Development Agency

Elizabeth Brighouse Member 14/12/2004 – 13/12/2006 7,931 24

Robert Douglas Deputy (Chair) 14/12/2004 – 13/12/2007 15,861 48

Imtiaz Farookhi Member 14/12/2004 – 13/12/2007 7,931 24

William Wakeham Member 14/12/2004 – 13/12/2007 7,931 24

South West Industrial Development Board

Ruth Bagley Member 01/01/2004 – 31/12/2006 0 12

John Crownshaw Member 01/01/2004 – 31/12/2006 0 12

Alan Neil Hayman Member 01/01/2004 – 31/12/2006 0 12

Rama Warren Nand-Lal Member 01/01/2004 – 31/12/2006 0 12

Victoria Pickering Member 01/01/2004 – 31/12/2006 0 12


226



South West of England Regional Development Agency

Nicholas Buckland Deputy (Chair) 14/12/2004 – 13/12/2007 15,861 48

Christine Channon Member 14/12/2004 – 13/12/2007 7,931 24

Nigel Costley Member 13/12/2004 – 13/12/2005 7,931 24

Alan Courts Member 14/12/2004 – 13/12/2007 7,931 24

Brian Kemp Member 14/12/2004 – 13/12/2006 7,931 24

Colin Skellett Member 14/12/2004 – 13/12/2007 7,931 24

Technology Strategy Board

Alan Begg Member 27/09/2004 – 26/09/2006 0 8

Catherine Beech Member 27/09/2004 – 26/09/2006 0 8

Janet Brown Member 27/09/2004 – 26/09/2006 0 8

John Brown Member 27/09/2004 – 26/09/2006 0 8

Nick Buckland Member 27/09/2004 – 26/09/2006 0 8

Joseph Feczko Member 27/09/2004 – 26/09/2006 0 8

Anne Glover Member 27/09/2004 – 26/09/2006 0 8

Michael Howse Member 27/09/2004 – 26/09/2006 0 8

Julia King Member 27/09/2004 – 26/09/2006 0 8

John O’Reilly Member 27/09/2004 – 26/09/2006 0 8

Graham Spittle Chair 01/09/2004 – 31/08/2006 0 12

Michael Walker Member 27/09/2004 – 26/09/2006 0 8

Fields Wicker-Miurin Member 27/09/2004 – 26/09/2006 0 8

UK Chemical Weapons Convention National Authority Advisory Committee

Ian Kenyon Member 16/02/2004 – 30/06/2007 0 2

Colin Kinnear Member 16/02/2004 – 30/06/2007 0 2

Moira McMillan Member 16/02/2004 – 31/12/2005 0 2

Ken Patterson Member 16/02/2004 – 30/06/2007 0 2

Peter Plant Member 16/02/2004 – 31/12/2005 0 2

Julian Perry Robinson Member 16/02/2004 – 31/12/2005 0 2

United Kingdom Atomic Energy Authority

Barbara Thomas Judge Chair 30/07/2004 – 29/07/2007 60,000 30

Welsh Consumer Council

Wycliffe Barrett Member 13/04/2004 – 12/04/2007 1,530 15

Carys Evans Member 01/10/2004 – 30/09/2008 1,500 15

Stewart Kelly Member 13/04/2004 – 12/04/2009 1,530 15

Anne Morgan Member 01/10/2004 – 30/09/2008 1,500 15

Eifion Pritchard Member 13/04/2004 – 12/04/2007 1,530 15

Malcolm Smith Member 13/04/2004 – 12/04/2009 1,530 15

Sally Jane Thomas Member 13/04/2004 – 12/04/2007 1,530 15

John Robert Williams Member 13/04/2004 – 12/04/2009 1,530 15

West Midlands Industrial Development Board

Lynne Marlane Evans Member 01/01/2004 – 31/12/2006 0 12

Royston Jones Member 01/01/2004 – 31/12/2006 0 12

Andrew Manning-Cox Member 01/01/2004 – 31/12/2006 0 12

David John Waller Member 01/01/2004 – 31/12/2006 0 12

Womens National Commission

Anita Gale Commissioner 24/01/2004 – 23/12/2005 0 24

Jane Esuantsiwa Goldsmith Commissioner 25/01/2004 – 23/01/2006 0 24

Nicola Harwin Commissioner 25/01/2004 – 23/01/2006 0 24

Yorkshire Forward

Eileen Bosomworth Member 14/12/2004 – 13/12/2006 7,931 24

Christopher Haskins Member 14/12/2004 – 13/12/2007 7,931 24

Arshad Javed Member 14/12/2004 – 13/12/2007 7,931 24


227



Christopher King Member 14/12/2004 – 13/12/2007 7,931 24

Laura Moynahan Member 14/12/2004 – 13/12/2007 7,931 24

Linda Pollard Member 14/12/2004 – 13/12/2007 7,931 24

Aiden Rave Member 14/12/2004 – 13/12/2007 7,931 24

Janet Wilson Member 14/12/2004 – 13/12/2007 7,931 24

Yorkshire/Humberside and East Midlands, Industrial Development Board

Andrew Peter Bradley Member 01/01/2004 – 31/12/2006 0 12

Christine Margaret Dunn Member 01/01/2004 – 31/12/2006 0 12

Gary Lumby Member 01/01/2004 – 31/12/2006 0 12

Edward Mogg Stanners Member 01/01/2004 – 31/12/2006 0 12


228



C1 Electronic Service Delivery

C2 Better Regulation

C3 Investment and AssetManagement

C4 Capital Modernisation Fund

C5 Invest to Save Budget

C6 Public Accounts CommitteeReports

C7 Environmental Performance

C8 Health and Safety Report

Annex C

Managing theDepartment

229

Annex C1

Electronic Service Delivery


230

SMALL BUSINESS SERVICE:

The national Business Link e-channel – website2 and distributed call system ✔

(0845 6009006) – plays a pivotal role in the delivery of joined-up Government information and support services to small businesses

Business Support Directory3 – information on a range of support products ✔

available from Government for business

Grant for Research and Development (formerly Smart):

▼ Dedicated web pages4 – application forms and guidance notes can be ✔

downloaded and hard copies of literature and forms can be ordered

▼ Electronic payment of Grant for R&D and on-going Smart grant instalments ✔

Grant for Investing in an Innovative idea5 ✔

Benchmark Index6

Knowledge Transfer Partnerships7 – information and application forms ✔

STEP8 ✔

Small Firms Loan Guarantee9:

Web page with scheme details on the DTI and Businesslink websites ✔

Booklet available as a download from the DTI website ✔

Communication via email ✔

Most payments under guarantee made to lenders by BACS ✔

Ongoing premium payments for large loans made electronically by Direct Debit ✔

REGIONAL SELECTIVE ASSISTANCE:

Scheme now closed to new applications – ongoing grant instalments made ✔

electronically via BACS

Enterprise Grants

Scheme now closed to new applications – ongoing grant instalments made ✔

electronically via BACS

THE PATENT OFFICE10:

Renewals of Patents (receipt of applications and issuing certificate) ✔

Renewals of Trade Marks and Designs (receipt of applications and issuing certificate) ✔

New applications for Trade Marks ✔

New applications for Patents ✔

General public search facility (Patents, Trade Marks and Designs) ✔

1 As at end-December 2004 2 www.businesslink.gov.uk3 www.businesslink.gov.uk/support4 www.businesslink.gov.uk/r-d5 www.dti.gov.uk/innovative-idea6 www.benchmarkindex.com7 www.ktponline.org.uk8 www.step.org.uk9 www.businesslink.gov.uk/sflg; www.dti.gov.uk/sflg10 www.patent.gov.uk

Service Enabled Enabled by Enabled after

now1 end of 2004 end of 2005

WEIGHTS AND MEASURES11:

Type approval and Calibration; provision of metrology training ✖ ✖ ✔

[A number of facilities are already available online. A review of the full scope (Part) (Part)of the online service is underway.]

SCIENTIFIC RESEARCH:

Information on opportunities in scientific research and training and on Research ✔

Council12 portfolios

Scientific Research Grant Services ✔

Scientific Research Administration Programme ✖ ✔

(Part)

SCIENCE & TECHNOLOGY:

The Office of Science & Technology (OST) promotes UK science and ✔

technology through a variety of on-line channels13

LINK14 Collaborative Research Scheme website ✔

Global Watch Service:

The ‘Globalwatchonline’ website15 provides UK businesses with up to the minute ✔

data on technology developments worldwide

BIOTECHNOLOGY:

Provision of information about biotechnology and the delivery of Government ✔

services to biotechnology companies through a government-wide biotechnology portal – ‘i-bio’16

CONSUMER ADVICE:

‘Consumer Direct’ national consumer helpline ✔

Website available nationally and regionally based national telephone helpline available in 4 “pathfinder” areas.

Consumer Support Network17 ✔

National Debtline – website18 and call service (0808 808 4000) ✔

ENERGY GROUP:

Energy statistics ✔

Domestic fuels data ✔

Quarterly fuels data ✔

Fuel stocks – key data ✖ ✔

(Part)

On-line consultations ✔

Overhead line applications ✖ ✔

Way-leave applications ✖ ✖ ✔

[Delayed beyond end-2005 to ensure adequate consultation and phased delivery of services]

Energy Reserves and Development19:

North Sea production reporting ✔

Well Operations and Notifications System ✔


now end of 2005 end of 2005

Annex C: Managing the Department

231

11 www.nwml.gov.uk12 www.research-councils.ac.uk; www.bbsrc.ac.uk; www.cclrc.ac.uk; www.epsrc.ac.uk; www.esrc.ac.uk; www.mrc.ac.uk; www.nerc.ac.uk;

www.pparc.ac.uk13 www.ost.gov.uk; www.foresight.gov.uk; www.set4women.gov.uk; www.cst.gov.uk14 www.ost.gov.uk/link15 www.globalwatchonline.com16 www.i-bio.gov.uk17 www.csnconnect.org.uk18 www.nationaldebtline.co.uk19 www.og.dti.gov.uk

UK Oil Portal20

a) Supply chain database ✔

b) Public release of data ✔

c Environmental consents ✔

d) Decommissioning North Sea platforms ✔

e) Pipeline consents ✖ ✔

f) Awarding North Sea licences ✖ ✔

g) Environmental inspections ✖ ✔

h) Emissions reporting21 ✔

i) Web services ✖ ✔

COAL HEALTH CLAIMS22:

Information about compensation schemes; claims processing ✔

EXPORT LICENCES23:

Issue of standard individual export licences ✔

Issue of open individual export licences

[The majority of applications are already received electronically on disc.] ✖ ✔

(Part)

TIGER24– Tailored Interactive Guidance on Employment Rights. Interactive ✔

guidance on specific areas of rights/obligations, enabling users to access only the information that relates to their own needs and circumstances

EMPLOYMENT RELATIONS:

ER website25 provides information for employers, workers, advisers and ✔

researchers on a broad range of employment relations topics.

Basic information targeted at smaller employers available through Busineslink.gov26 ✔

Basic information targeted at employees ✖ ✔

Work-Life Balance Campaign27 – information and case studies on work-life issues ✔

Employment Agency Standards28

Electronic information via the ER website ✔

Electronic complaints service ✔

EMPLOYMENT TRIBUNALS29:

Applications to employment tribunals ✔

ADVISORY, CONCILIATION & ARBITRATION SERVICE30:

On-line request for assistance via e-mail communication direct with Acas staff ✔

(individual and collective conciliation and advice)

Web-based provision of Acas free publications on good practice ✔

Web-based provision of Acas priced publications on good practice ✔

Web-based service to purchase Acas publications on-line ✔

Foreign language versions of core Acas publications on the website ✔

Acas Arbitration Scheme for unfair dismissal cases ✔

Web-based service to allow on-line bookings for Acas events ✔




232

20 www.og.dti.gov.uk/portal21 www.eems-database.co.uk22 www.dti.gov.uk/coalhealth; www.coalclaims.com23 ww.elvis.dti.gov.uk24 www.tiger.gov.uk25 www.dti.gov.uk/er26 www.businesslink.gov.uk27 www.dti.gov.uk/work-lifebalance28 www.dti.gov.uk/er/agency29 www.employmenttribunals.gov.uk30 www.acas.org.uk

Dispute and problem solving service ✔

Web-based “helpline” ✔

Web-based on-line learning facility for Acas courses on good employment practice. ✔

National telephone helpline service (08457 47 47 47) ✔

INSOLVENCY SERVICE31:

Web-based interactive questionnaire for citizens

Electronic petition for bankruptcy ✖ ✔

Provision of information on FAQ’s etc by way of leaflets (also available in ✖ ✔

Urdu and Cantonese) on The Service’s website

Online access for the Insolvency Practitioners (IP’s) to view the estate ✔

accounts of insolvents whose affairs are being dealt with by the IP’s

Full e-Banking service

[Timing dependent on replacement financial systems] ✖ ✖ ✔

Online access for citizens and businesses to the Individual Insolvency Register ✔

E-processing services for Insolvency Practitioners. Application forms are ✖ ✔

available electronically. Payment is already electronic, via BACS (Part)

[Plans for full e-processing currently under review following the move of the Redundancy payments Service to the Insolvency Service]

Interactive ready reckoner for calculating entitlement32 ✔

COMPANIES HOUSE33:

Free information available on company details and disqualified directors ✔

Chargeable information for all company data and documents purchasable on ✔

account via subscription service34

Key company information (accounts, annual return, company reports) ✔

purchasable on a web site by credit card

Bulk electronic information (data and images) supplied to major customers on tape ✔

New company incorporations via company agents ✔

Receipt of statutory information, including:

a) annual returns ✔

b) accounts (on-line submission) ✖ ✔

c) changes to company and director details ✔

d) registration of mortgage charges ✖ ✖ ✔

[Timing dependent on legislative plans of the land Registries of both England & Wales (Part) (Part)and Scotland. Facility for a limited number of high volume presenters already exists] (Part) (Part)

Provision of forms ✔

Electronic correspondence:

E-mail addresses for key, named individuals available now on web site and ✔

Call Centre handles general email correspondence

Use of email addresses as part of Companies House regulatory functions – ✖ ✖ ✔

dependent on changes in primary legislation

Totals No of No of No of Enabled Enabled Enabled

Services = 73 Services = 86 Services = 91

ESD ESD ESDCapability = Capability = Capability =

80% 94.5% 100%




233

31 www.insolvency.gov.uk32 www.dti.gov.uk/er/redundancy/ready33 www.companieshouse.gov.uk34 www.direct.companieshouse.gov.uk


234

DTI is strongly committed to the better regulation agenda. Our Five Year Programme set out anambitious forward programme including a target for delivering at least £1 billion worth ofderegulatory savings.

Culture Change

DTI is working to make culture change a reality by promoting better policy making as an all-encompassing process, involving good consultation, consideration of alternatives to classicregulation, improved impact assessment and review and evaluation. A network of Champions,at Senior Civil Servant level, in all major policy areas aims to ensure these disciplines becomeembedded across the Department. We use training courses (95% satisfaction amongstattendees), seminars, presentations to new policy project teams, and an improved and well-publicised Intranet site (100% awareness amongst policy teams) to foster change. Topmanagement is regularly advised on better regulation by a panel of private sector experts.DTI has also extended its “week in business” to staff below senior civil service level, increasedthe number of inward secondments from the private sector and worked to ensure civil servantsinclude Better Regulation in their annual objectives.

The Secretary of State’s presence on the Prime Minister’s Panel for Regulatory Accountabilityhas had a strong impact in supporting the focus on better regulation for business within DTI andacross Whitehall.

The UK Presidency of the EU Council of Ministers in the second half of 2005 is anotheropportunity to move forward building on our recent work with other Presidency countries forregulatory reform at EU level.1 Training for policy-makers and Chairs of EU meetings, as well asbriefings and events for Ministers, officials and MEPs are focusing in particular on improved EUimpact assessment – with emphasis on competitiveness-testing – and simplification.

DTI is seeking, through a structured communications strategy, co-ordinated with Cabinet Officeand FCO, to set out more clearly the benefits of good policy-making, the progress andsuccesses to date, and the challenges remaining, with the aim of helping stakeholders engagesuccessfully and push for change.

Regulatory Impact Assessments (RIAs)RIAs

Compliance with Cabinet Office guidance on RIA process 100%

RIAs checked by DTI before formal clearance by CO 57% (new target)

Improving on last year’s 100% compliance with minimum standards, most of the Department’sRIAs are now subject to re-enforced internal scrutiny before they are formally assessed byCabinet Office. DTI’s better regulation team engages with policy officials early in the process,including at the Explanatory Memoranda stage, encouraging policy teams to issue initial RIAs

Annex C2

Better Regulation

1 Advancing Regulatory Reform in Europe: Six-Presidency Statement issued in December 2004 by Irish, Dutch, Luxembourg, UK, Austrian and FinnishGovernments, available at www.hm-treasury.gov.uk/media/B39/14/advancing_regulatory_reform_in_Europe.pdf

where EU developments are anticipated. An example of this is the Consumer Credit DirectiveRIA, praised by Cabinet Office for effectively informing consultation on EU negotiating lines.Plans for next year include exploring the scope for a standard DTI template for greater clarity andconsistency (consistent with Cabinet Office guidance); and ensuring continuous improvement ofRIAs through on-going stakeholder engagement, and joint-working across policy teams.

DTI is integrating project-planning into policy development, to ensure sufficient time is allocatedto quality RIAs and good policy-making. The Measuring Instruments Directive will be transposedinto UK law using project management (Prince 2) principles, as will be the Equal TreatmentDirective. An RIA produced by DTI with the Department for Transport on emissions legislation(Euro 5 tailpipe emissions), was considered exemplary by Cabinet Office, and used in EUnegotiations to lobby for cost-effective standards: statistical modeling indicated that proposals toreduce emissions to the very lowest levels appeared disproportionately costly – for onlymarginal environmental gain.

On legislation requiring manufacturers to dispose of vehicles they produce at the end of theirlife-cycle (EU End of Life Vehicles Directive), the RIA inspired a light-touch, market-basedapproach to transposition. This reduced costs to business from £100-£150/car to around £25/car,and should reduce overall costs from £200 million to £40-80 million a year (based on 2 millionend-of-life vehicles per year) without prejudicing the environmental objectives. On extendedwarranties proposals, provisions on “similar prominence” of extended warranties to priceinformation were changed as a result of robust cost-benefit analysis provided by stakeholderswhich showed that benefits of the proposal did not outweigh its cost of implementation.

Alternatives to Classic Regulation

The EC and the European Automobile Manufacturers Association came to a VoluntaryAgreement in July 1998 that committed manufacturers to reduce the carbon dioxide emissionsfrom new passenger cars by over 25%, to an average carbon dioxide emission figure of 140g/km by 2008. The two other areas covered by this agreement are fuel economy labelling, andpromoting fuel efficiency by fiscal measures.

This agreement is subject to an annual review. The 2004 review identified that the targets setin 1998 were on course to be met in 2008.

Looking at a heavily regulated sector like automotive, there are other examples of alternativesto regulation. The sector itself has voluntarily offered certain features like antilock brakes,contributing to increased vehicle safety. The Society of Motor Manufacturer and Traders (SMMT)introduced passenger car labels in the showroom ahead of legislative requirements. Othervoluntary offers by the sector include provision of daytime running lighting and emergency brakeassist technologies, aimed at improving safety.

Key to ensuring the successful adoption of alternatives is an appreciation that they do notrepresent a soft option, and that there are often equally valid alternative ways of achieving adesired objective. These may also enable industry to commercialise technologies that wouldotherwise prove uneconomic to implement.

DTI was involved in a number of changes in the area of corporate governance in 2004, the majorityof which were non-legislative. These included expansion of the remit of the Financial ReportingCouncil and the pro-active enforcement of accounting standards. The general approach was light-touch, reflecting the findings of the post-Enron review of the UK’s regulatory framework.


235

In negotiating the Electricity Security of Supply Directive, DTI’s Energy Group persuaded the ECto drop a regulatory provision requiring Member States to have inter-connector capacityamounting to 10% of installed electricity generation capacity. DTI explored alternativeapproaches and successfully promoted, in collaboration with other Member States, the benefitsof a market-based approach to energy infrastructure without the need for specific targets.This involved high-level interventions with other member states; sustained and co-ordinatedinfluencing in EU meetings of officials and use of informal networks. Changes made to theDirective brought a UK saving of £750 million, on the assumption that half the cost of the inter-connectors would have been met by another Member State; otherwise total UK costs wouldhave been around £1.5 billion.

ConsultationDTI consultations (excluding joint consultations)

Total consultations 71

Compliance with Cabinet Office Code of Practice: 681 (96%)12-week rule applied or permissible exceptions: supplementary re-consultations or Ministerial authorisation.

Under 12-week consultations not authorised by a Minister 3

Compliance with DTI consultation template 81%

Consultations using two or more consultation methods 98%Joint consultations (DTI not in the lead)

Total consultations 17

Consultations lasting at least 12 weeks 3 (18%)

Compliance with the Cabinet Office Code of Practice on consultation is at 96% for DTI-onlyconsultations and 62% with joint consultations included. Of the seven DTI consultations lasting lessthan 12 weeks, four highlighted Ministerial authorisation and reasoning for the short period andthree failed to do so. However, all seven had good reason – three involved narrow company-specificissues; one concerned an exemption with cost-reducing effect; two consultations needed todovetail with the EU and domestic Parliamentary scrutiny timetable, and one was a pre-consultationindustry sounding2.

Joint consultations have been separated out in this reporting year as they raise specific issues.They are concentrated in energy policy and include 14 consultations lasting under 12 weeks, ofwhich 13 were joint DTI/Ofgem exercises and one was a joint DTI/Defra exercise. The shorterduration of many of these reflects a succession of consultations on related, and often technical,issues. Ofgem is an independent regulator and its practice has in part been developed on thebasis of the statutory requirement that it consults for no less than 28 days. DTI is encouraging it


236

1 Of these 68 consultations 6 were supplementary re-consultations and 4 were under 12 week consultations authorised by a minister.2 The seven consultations lasting less than 12 weeks were: 1/ Licence Exemptible 50-100MW Generating Stations (authorised reason - narrow

harmonisation issue arising from wider BETTA extension of English/Welsh electricity trading arrangements to Scotland); affects four electricity-generating stations in Scotland owned by one company); 2/ Proposed exemption for certain gas transporters from a prohibition on conductingparticular shipper activities (authorised reason - potential £332 million net consumer benefit); 3/ Consultation on proposals to tackle the anti-socialuse of fireworks through the regulation of their use and supply (authorised reason - need to meet Parliamentary timetable for draft Order to bescrutinised in parallel with Home Office enforcement powers); 4/ European Consumer Credit Directive (authorised reason - to ensure that wedevelop our UK negotiation position in time for the Council negotiations); 5/ Proposed Terms of Reference of forthcoming Review of RenewablesObligation (innovative pre-consultation to address industry concerns over regulatory certainty and thus maintain investor confidence); 6/ Exemptionfrom the requirement for a licence to generate electricity: Seascape Energy Ltd / Burbo Bank Windfarm (narrow company-specific issue); 7/Exemption from the requirement for a licence to generate electricity: Scarweather Sands Ltd, Norfolk Offshore Wind Ltd, Northern Offshore WindLtd & GE Gunfleet Ltd (narrow issue affecting 4 companies).

to consider how to improve its consultation practice, as part of its new statutory duty under theEnergy Act 2004 to meet regulatory best practice.

DTI works continuously to raise its game on consultation, holding masterclasses in stakeholderengagement, as well as visits and events at all levels of the Department and with our Agencies.Improving consultations on EU proposals has been a key focus this year. EU negotiationsprogress rapidly, making it difficult to accommodate a lengthy consultation process. Our solutionis to respect the 12-week period but to be more creative, encouraging policy officials to engagein early informal industry soundings by publicising Commission proposals, and producing initialand draft RIAs for comment, at the earliest opportunity, whilst formal consultation documentsare still being drafted.

A particular success has been the sector-specific groups bringing together industry and officialsfrom across Government to look at the forward agenda. Groups covering Automotive andBioscience sectors (VIPER and BIGRAG) have been running for some time. Five new groupshave now been set up: in chemicals, construction, retail and e-business sectors. We are pushingthis approach at the EU level and CARS 21, a high level Group looking at regulation affecting theautomotive sector will, we hope, help develop a model for involving business systematically inearly policy development.

Stakeholders have raised concerns about consultation fatigue and we need to find ways totackle this. In the area of Company Law, for instance, we are consulting simultaneously on threeEU proposals through the same “umbrella” document, even though one of the proposals is yetto be issued.

We have had some successes. DTI was praised by industry groups for listening to, and actingon concerns raised during consultation on the Operating and Financial Review element ofcompany reporting requirements. The RIA for the Consumer Credit Act was praised by CabinetOffice for its analysis of the evidence. This was broken down into four segments, eachseparately discussed in stakeholder groups. On the Fireworks Regulations, DTI identifiedminority faith and ethnic groups as key stakeholders and pro-actively engaged with them,ensuring that faith and ethnic-minority usage of fireworks is documented in the regulatoryguidance.

We encourage officials to continue to engage with stakeholders post-consultation. For example,on the Export Control Act, post-consultation liaison with stakeholders via industry liaison groupshas included consideration and refinement of ECA guidance.

Regulatory ReformRegulatory Reform Action Plan (RRAP)

Measures in RRAP at start of 2004 period (including Regulatory Reform Orders (RROs)) 60

RRAP commitments already delivered 43 (72%)

RRAP commitments on schedule (including those already delivered) 53 (88%)

RRAP measures superseded or dropped 4 (12%)No. of RROs delivered 4

No. of RROs delayed 3

No. of RROs remaining to be delivered 2

New regulatory reform measures 4


237

New regulatory reform measures identified this year include the possibility of a power in theCompany Law Reform Bill to modify company law by super affirmative Order similar to aRegulatory Reform Order (RRO). The Bill is itself strongly deregulatory and we expect it togenerate annual savings for business of around up to £200 million.

RROs delivered this year include Directory Publishing (annual total savings to business of around£1 million), Sunday trading notification and patents law improvements. The latter forms part of awider initiative to simplify legislation and procedures in Intellectual Property law, includingchanges to Trade Mark Rules. Currently in the Parliamentary process, the repeal of the TradingStamps Act is likely to produce annual administrative cost savings of £0.5-£1.5 million. AnotherRRO soon to enter Parliament is self-verification for businesses maintaining weighing andmeasuring instruments. Three RROs have been delayed while legal considerations areaddressed (offshore wind farms, easing the consents procedure, copyright law, aspects of thePetroleum Act 1998). Four measures are no longer going ahead in the form stated in the RRAP:three of these concern weights & measures and are expected to be superseded by forthcominglegislation; the remaining measure has been dropped. Other opportunities to deregulate throughRROs are being considered, and the Department is actively feeding into the Cabinet Officereview of the RRO process.

DTI’s focus is on achieving regulatory reform outcomes, through whichever instrument is themost appropriate. Additional non-RRO deregulatory initiatives include exempting 69,000companies from statutory audit requirements by raising the threshold to £5.6 million, generatinganticipated annual savings to business of £94 million. Changes to company law enabled around2,200 large companies to buy and hold their own shares, giving them greater flexibility inmanaging their capital and saving firms capital costs of up to £25,000 per year, amountingannually to around £55 million. The modernisation of the competition regime is likely to produceannual savings to business of up to £1.5 million. The reform of distance selling legislation willreduce burdens on SMEs while maintaining protection for consumers, and the administration ofprice changes to goods sold in non-standard units has been simplified. We are also committedthrough our Five Year Programme to ensuring the scope for simplification of the existing law issystematically reviewed wherever new measures are being considered.

Review of Regulation

DTI’s review of the Employment Relations Act 1999 informed the Employment Relations Act2004; and the Directors’ Remuneration Report Regulations 2002 was also reviewed in 2004.Legislation expected to be subject to a future review includes the Operating and FinancialReview and the implementation of International Accounting Standards.

The Advisory Forum on the Impact of Employment Policies has been set up to assess theimpact of the regulatory framework on employment. This will review international experiencesof regulatory and non-regulatory approaches to employment relations, propose methodologies toassess costs and benefits of proposed policy options and advise on how best to evaluate theimpacts of employment relations regulation.

This is part of the wider commitment DTI has now made to systematic evaluation of all its policyand regulation as a means to strengthen the evidence-base for appraising future policy. This willbe a central element of its performance management going forward.


238

To tie in with this and its wider commitments to reduce costs of regulation to business, DTI isleading cross Whitehall work on assessment of regulatory burdens and benefits – including onassessment of cumulative impacts.

Reducing Paperwork and Administrative Burdens

DTI is working hard to deliver new approaches to reducing burdens. The Better Regulation TaskForce2 expressed support for common commencement dates (CCDs) for employment law andrecommended they be extended to other areas. Initial figures for the potential benefit tobusiness from this reform in the employment area suggest savings of up to £13 million over thenext five years. CCDs will be extended in 2005 to cover DTI legislative areas of consumer,corporate and intellectual property law. The Department’s SBS has produced a website with‘at-a-glance’ plain English guidance for business on new regulation which has been praised byowner-managers of small firms.

In line with the interim report from the Hampton Review, DTI is running a cross agencyenforcement pilot, focussed on joined up and consistent enforcement of regulation in the retailsector. Gerry Murphy, CEO of the Kingfisher Group, is leading this.

In the EU, DTI is lobbying to ensure that administrative burdens are considered for all newproposals, and included in EU impact assessments. During the UK Presidency the Department willpush for progress on 15 simplification proposals agreed by Member States in November 2004, andwill work with the European Commission to identify further simplification proposals.

EU Better Regulation

As the Department responsible for a wide range of EU legislation and for the CompetitivenessCouncil, the DTI has been at the forefront of the Government drive for better regulation in theEU, working with Cabinet Office and HM Treasury to develop the 6-Presidency Initiative onRegulatory Reform (see paragraph 9.3). DTI’s priorities on EU better regulation are ensuringrigorous competitiveness assessment of all EU proposals, and simplification of EU law. DTI ledwork by a group of Member States to develop the concept of competitiveness-testing, focusingon how impact assessment could be strengthened to cover the competitiveness dimension andto ensure stronger business engagement in policy making. The new Commission has publiclystated its commitment to regulatory reform, including this new concept of competitivenesstesting, and has recently set out a new Better Regulation package.

Under the Netherlands’ Presidency, Member States agreed a number of proposals should goforward for simplification including amending EU Company Law to reduce burdens in annualreporting; reducing health & safety reporting from annual to six-yearly; more compact medicaldevices legislation (from five directives to two); reducing unnecessary administrative burdens inwaste legislation by clarifying, simplifying and updating; ensuring food labelling laws areconsistent with other EU rules to avoid duplication; and harmonising automotive legislation withinternational rules. We shall work with the Commission to aim to deliver a further package ofproposals for simplification during the UK Presidency.


239

2 The Better Regulation Task Force (www.brtf.gov.uk) is an independent body set up in 1997 to advise Government on achieving Good Regulation, asdefined through five principles: proportionality, accountability, consistency, transparency and targetting.


240

The Department’s investment strategy and a detailed analysis of tangible fixed assets includingplanned new investment, asset disposal plans, Private Finance Initiative and Public PrivatePartnership contracts and resource impact relating to assets and investments for DTI, itsAgencies and NDPBs within the accounting boundary can be found in the DepartmentalInvestment Strategy (the “DIS”). This document also provides details of the Department’sapproach to procedures and systems for managing investments and assets and can be found onthe Department’s website3.

A summary of the Department’s capital expenditure by activity can be found in Table A3: CapitalBudget, in Annex A of this Report. Up to date asset and investment information may also beobtained by consulting the Departmental Resource Accounts for 2003/044.

This Fund aims to support innovative capital projects, through the provision of some or all of theresources they require to proceed. The Fund supports only capital expenditure, and all currentcosts have to be met by bidders.

Up to 2002/03 there were four rounds of the CMF in which the Department secured £278.9million in relation to twelve projects. Details of these projects can be found in previousExpenditure Plans Reports. No new DTI projects were allocated funding during 2003/04 or2004/05.

The ISB5 aims to finance projects that demonstrate innovation or improvements in public servicedelivery. It is a joint venture between HM Treasury and the Cabinet Office and supports projectsconducted in partnership between two or more public bodies.

Up to 2003/04 there were six rounds of ISB in which the Department was allocated £18.25million across 11 projects. Details of these projects can be found in previous Departmentalreports. The Department has no ISB projects in round seven of ISB.

Annex C5

Invest to Save Budget

Annex C4

Capital Modernisation Fund

Annex C3

Investment and Asset Management

3 www.dti.gov.uk/about/dis/index.htm4 www.dti.gov.uk/expenditureplan/dtiacc0304.pdf5 For additional information on the ISB see www.isb.gov.uk


241

The Public Accounts Committee (PAC) published three reports in the Department’s area ofresponsibility in 2004 as follows:

The PAC’s report on CMI, a joint educational and research initiative between the universities ofCambridge (UK) and MIT (US), focused on three areas:- Setting up CMI; Managing the initiativeto meet its objectives; Securing benefits for the UK.

The Committee concluded that CMI provides important lessons for the public sector on the timeand planning required to set up a ground-breaking initiative. They believe that CMI’s work haspotential for major impacts on the UK economy but many of its achievements will not be knownfor some time.

They recommended that, in order to ensure maximum benefit for UK, the Department shouldplan for long-term monitoring and evaluation of CMI’s outcomes, and should work with CMI tocreatively explore and develop options for continuation of CMI activities when guaranteed publicfunding ends in 2006.

The Department has approved the establishment of an independent Programme Review Committeeto assess and evaluate the CMI programme and its outputs. The initial review has been held andthere will be further reviews in 2005 and 2006, after which the membership will be reviewed.

As Government Departments develop their plans for allocating SR 2004 funds, the Departmentis actively working with CMI and stakeholders to identify opportunities for funding to helpsustain key activities, and to ensure that CMI effectively disseminates the models of knowledgeexchange it is developing so that others learn from the CMI experiment.

The PAC’s report examined the extent to which nuclear risks originally transferred fromGovernment to the privatised British Energy (BE) have been accepted back, and the adequacy ofthe Department’s monitoring of the risks posed to the taxpayer by BE’s nuclear liabilitiesbetween privatisation and BE’s financial difficulties in September 2002. The Committee foundthat despite retaining ultimate responsibility for the residual liabilities associated with nuclearpower, the Department treated BE after privatisation in the same way as other companies anddid not put in place proper risk management arrangements as suggested in an earlier PACreport. The Committee recommended that looking forwards the Department should establisheffective oversight of BE’s financial position.

The liabilities agreements agreed between the Government and BE as part of the company’srestructuring anticipated PAC’s recommendations with regard to the oversight of BE’s financialposition, including taking rights of access to financial information. These agreements came fullyinto effect on 14 January 2005 when BE successfully completed its restructuring.

37th Report of 2003/04: Risk management: The nuclear liabilities of British Energy plc:

9 September 2004

31st Report of 2003/04: Cambridge – MIT Institute: 24 June 2004

Annex C6

Public AccountsCommittee Reports

The Government has accepted the recommendations made by the PAC. There has been aprogressive lessening of bureaucratic control by Government Departments over the RegionalDevelopment Agencies (RDAs).

Steps taken by the Government include:

▼ RDA Performance monitoring has already been reduced from four times a year to twice ayear;

▼ A new more independent performance monitoring system will be implemented in 2005/06;

▼ The RDAs’ funding arrangements have been streamlined. A “Single Pot” budget wasintroduced in April 2002, allowing the Agencies much greater spending flexibility;

▼ RDAs’ combined budget has risen steadily. Under the 2004 Spending Review, the RDAbudgets will increase from £1.8 billion in 2004/05 to £2.3 billion by 2007/08;

▼ On enterprise, the RDAs have been given responsibility for the operations of the BusinessLinks from April 2005; and

▼ On innovation RDAs are promoting links between universities and companies and from April2005 take over responsibility for the R&D Grant scheme for small businesses.

Under the new arrangements for tasking the RDAs, tasking will be linked to a set of PSAtargets, agreed between the RDAs and departments as having a significant regional economicdimension. Each RDA will also agree with departments the region-specific outputs andoutcomes that they will deliver in support of each of the PSA targets. This new approach willhelp to ensure that national and regional targets are more closely aligned and that there is moresystematic monitoring of progress towards them.

51st Report of 2003/04 – Success in the regions: 7 December 2004


242

The Department continues to work toward achieving the framework for SustainableDevelopment in the Government Estate within its London HQ estate. The Carbon Trust iscarrying out an energy survey of the DTI London headquarters (HQ) estate throughout thefinancial year 2004/05 to examine energy saving awareness amongst occupants and the use ofalternative energy.

During 2004/05 we:

▼ Successfully launched the web-based Environmental Management System (EMS) andachieved external verification of the ISO 14001 certification of our EMS in September 2004without any significant non-conformity;

▼ Met our waste recycling targets with 59% of DTI HQ waste being recycled, introducedadditional recycling for IT and refrigeration and increased the recovery of paper and card;

▼ Initiated a number of energy and environmental projects including improving cooling andlighting controls;

▼ Increased the amount of energy purchased at DTI HQ from renewable sources (32%);

▼ Worked to reduce the DTI’s environmental footprint in London through an estaterationalisation programme which will see DTI vacate four buildings during 2005/06; and

▼ Progressed towards meeting our water consumption target although consumption hastemporarily crept up due to leaks in two buildings which have now been addressed.Underlying consumption is still on target.

HQ Estate Electricity Use 2004

kW

h

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

DecNovOctSepAugJulJunMayAprMarFebJan

Target ConsumptionActual Consumption

Annex C7

Environmental Performance


243

HQ Estate Gas Use 2004

HQ Estate Water Use 2004

m3

0

1000

2000

3000

4000

5000

6000

7000



kW

h


0

200000

400000

600000

800000

1000000

1200000

1400000

1600000



244


245

The Department is committed to providing asafe working environment for all staff andvisitors. It recognises the importance ofworking in partnership with the DepartmentalTrade Unions, staff and contractors to ensurethe business is conducted in a way thatpromotes health and safety.

The Department’s Permanent Secretary isultimately responsible for health and safety inthe Department. For Departmental Agenciesthis responsibility is delegated to Agency ChiefExecutives who are responsible for all healthand safety matters in their Agency. ChiefExecutives submit an annual report on healthand safety to their Agency Steering Boards.For DTI HQ, health and safety responsibility isdelegated to the Director General, ServicesGroup.

In DTI HQ the Department’s Estates andAccommodation Unit (E&A), which is part of theServices Group, is responsible for co-ordinatinghealth and safety arrangements for the buildingenvironment. E&A proactively ensures that riskassessments, workplace inspections andincident investigations are undertaken and thatany identified remedial actions are completed.Its responsibilities extend to ensuring thatcontractors meet their health and safetyresponsibilities. It acts as the Departmentalintelligent customer for building-related healthand safety and provides advice and guidance toDepartmental Agencies and NDPBs.

Health and safety policies and practices areregularly reviewed against those of otherGovernment Departments and the privatesector. Accident statistics are collated andbenchmarked against data published by theHealth and Safety Executive (HSE). TheDepartment strongly supports the Government’sRevitalising Health and Safety initiative andstrives to set an example on health and safety.

During the year the Department worked inpartnership with the Departmental TradeUnions to review its health and safety policiesand procedures, and on a joint health andsafety in construction event to mark theEuropean Week of Action on Health andSafety. It also worked closely with the HSE onan initiative to reduce the burden of slips andtrips accidents.

The number of RIDDOR reportable accidents,non-reportable accidents, and working dayslost for reportable and non-reportableaccidents are set out in tables below.

2001/02 2002/03 2003/04 2004/05

(9 months)*

Staff 3 3 3 2

Contractors 3 2 0 2

Rate per 58 63 65 –100,000Employees

* April-December 2004Reported rate of injuries per 100,000 employees as reported to allenforcing authorities in 2002/03 and 2003/04 (provisional) for financialintermediation (except insurance and pension funding) were 146 and 150respectively, for insurance and pension funding (except compulsory socialsecurity) were 57 and 83 respectively, and for activities auxiliary tofinancial intermediation were 40 and 37 respectively. The Departmentalrate is comparable with, or combinations of, these reported rates.

2001/02 2002/03 2003/04 2004/05

(9 months)*

Staff 85 94 66 37

Contractors 11 15 14 9

Rate per 1,640 1,964 1,424 –100,000Employees

* April-December 2004.

Non-Reportable Accidents

Riddor Reportable Accidents

Annex C8

Health and Safety Report

2001/02 2002/03 2003/04 2004/05

(9 months)***

Staff 37.5 79* 65** 20

Contractors 28 24 2 7

Rate per 722 1,157 1,403 –100,000employees

* 54 days relate to an accident suffered by a member of staffparticipating in an outdoor activity on a staff awayday

** 47 days relate to an accident to a member falling on the same level *** April-December 2004

Working days lost for reportable and

non-reportable accidents


246

List Of Chapters/Figures andCorrespondingChapters/Figures inDepartmental Report 2004

247

1. DTI Strategy 1. DTI Strategy N/A N/A]

Fig 9.2

Fig 9.1

Fig 9.4

Fig 6.1 Expected SFIE/ RSA expenditure for2004/05 by region

Fig 6.2 Total Government funding for RDAs

Fig 6.3 DTI/ UK Trade & Investment onStrengthening Regional Economies

9. StrengtheningRegional Economies

6. Strengthening

Regional Economies

Fig 12.1

Fig 12.2

N/A

Fig 5.1 Small Firms Loan Guarantee

Fig 5.2 SMART and Enterprise Grant expenditurein England

Fig 5.3 Expenditure on Enterprise, Growth andBusiness Investment

3. Improving Businessperformance (part only)

8. Enterprise for All12. Finance forInvestment

5. Enterprise, Growth

and Business

Investment

Fig 4.2Fig 4.1. Expenditure on Knowledge Transfer4. Knowledge Transferand Innovation

4. Knowledge

Transfer and

Innovation

Fig 10.1

Fig 10.2

Fig 10.4

Fig 3.1 Research Councils capital assets

Fig 3.2 Breakdown of significant internationalsubscriptions by the Research Councils

Fig 3.3 Expenditure on Science

10. Science andEngineering

3. Science and

Engineering

Fig 2.1

Fig 2.2

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Fig 2.1 International comparisons of productivityper worker

Fig 2.2 International comparisons of productivityper hour

Fig 2.3 Higher Education Business CommunityInteraction (HEBCI) survey indicators

Fig 2.4 Public Research Sector Establishments(PSRE) survey indicators

Fig 2.5 Business R&D as share of GDP

Fig 2.6 Patent grants at the US Patent Office permillion population

Fig 2.7 Productivity growth (basic process) by sizeof enterprise, 1999-2002

Fig 2.8 VAT registration rates (registrations per10,000 adults)

Fig 2.9 PSA 9 gender equality indicators -progress summary table

Fig 2.10 Progress against the ethnic minorityemployment PSA target summer 2001 – summer2004

Fig 2.11 PSA 12 performance summary

Fig 2.12 Summary performance against previousspending reviews public service agreements

2. Progress onDelivering PSA Targets

2. Progress on

Delivering PSA

Targets

248

List Of Chapters/Figures andCorresponding Chapters/Figuresin Departmental Report 2004


2004/05 Chapter 2003/04 Chapter 2004/05 Figures 2003/04 Figures

Fig 18.1Fig 17.1 Service First Performance18. Managing theDepartment

17. Managing the

Department

Fig 17.2

N/A

N/A

Fig 17.3

Fig 17.4

Fig 17.5

Fig 17.6

Fig 17.7

Fig 17.8

Fig 17.9

Fig 17.12

Fig 17.13

Fig 17.14

Fig 17.15

Fig 11.2

Fig 17.16

Fig 16.1 SBS performance against targets for2003/04

Fig 16.2 SBS performance against targets for2004/05

Fig 16.3 Service First performance

Fig 16.4 SBS financial performance

Fig 16.5 Companies House performance againsttargets

Fig 16.6 Companies House financial performance

Fig 16.7 Patent Office performance against targets

Fig 16.8 Patent Office financial performance

Fig 16.9 NWML performance against targets

Fig 16.10 NWML financial performance

Fig 16.11 Insolvency Service performance againsttargets

Fig 16.12 Insolvency Service financialperformance

Fig 16.13 Redundancy payments

Fig 16.14 ETS performance against targets

Fig 16.15 Employment Tribunal applications byjurisdiction

Fig 16.16 ETS financial performance

17. The ExecutiveAgencies

16. The Executive

Agencies

N/A

Fig 15.1

Fig 15.2

Fig 15.3

Fig 15.4

Fig 15.1 UKAEA analysis of turnover 2004

Fig 15.2 BNFL financial data 2004

Fig 15.3 Royal Mail financial targets 2004

Fig 15.4 Royal Mail expenditure

Fig 15.5 Expenditure on Assets and Liabilities

15. Assets andLiabilities

15. Assets and

Liabilities

Fig 16.1Fig 14.1 Expenditure on Nuclear Security andExport Control

16. Nuclear Securityand Export Control

14. Nuclear Security

and Export Control

Fig 6.1Fig 13.1 Expenditure on Security of EnergySupply

6. Security of EnergySupply

13. Security of Energy

Supply

Fig 13.2Fig 12.1 Expenditure on Sustainability and theEnvironment

13. Sustainability andthe Environment

12. Sustainability and

the Environment

Fig 14.1

Fig 14.2

Fig 11.1 Sources of complaints leading tocompany investigations in

Fig 11.2 Expenditure on Corporate and InsolvencyActivity Framework

14. Corporate andInsolvency ActivityFramework

11. Corporate and

Insolvency Activity

Framework

Fig 11.1

Fig 11.3

Fig 10.1 National Minimum Wage enforcementactivity

Fig 10.2 Expenditure on Maximising Potential inthe Workplace

11. MaximisingPotential in theWorkplace

10. Maximising

Potential in the

Workplace

Fig 10.1

Fig 10.2

Fig 10.4

Fig 9.1 Expenditure on Extending CompetitiveMarketscience

5. Consumer andCompetition

6. Free and Fair WorldMarkets

9. Extending

Competitive Markets

N/AFig 8.1 Expenditure on Effective Channels withBusiness


8. Effective Channels

with Business

Fig 3.1

Fig 3.2

Fig 3.3

N/A

Fig 7.1 Number of participants supported atexhibition, missions and seminars

Fig 7.2 Inward Investment cases and effect on jobs

Fig 7.3 UK Trade & Investment ProgrammeExpenditure

Fig 7.4 Expenditure on Trade and Investment


7. UK Trade and

Investment

List Of Chapters/Figures and Corresponding Chapters/Figures in Departmental Report 2004

249

2004/05 Chapter 2003/04 Chapter 2004/05 Figures 2003/04 Figures

A

Administration costs A5expenditure indicators 2.196-2.197

Advisory bodies B5Advisory Council & Arbitration Service (ACAS)

achievements 10.28Code of Practice 10.26role 2.173, 10.27

Agency Workers Directive 10.12Agriculture & Environment Biotechnology

CommissionGM crops, report on 3.12Non-departmental Public Body review 3.12

Alternative Dispute Resolution (ADR) 10.28Annual Business Inquiry (ABI) 2-105Arts and Humanities Research Council

establishment of 3.25Assets and liabilities

coalhealth liabilities 15.7-15.10non-health liabilities 15.11-15.16

expenditure Fig. 15.5generally 15.1-15.2nuclear liabilities Ch.15 (text box), 15.5,15.6.performance in 2004/05 15.4-15.23plans for 2005/06 15.3postal services 15.17-15.20Shareholder Executive 15.21-15.23

Automotive sector C2

B

Bankruptcy Restrictions Orders (BRO) process11.7

Best Business Practiceaccess/support Ch.8 (text box)

Better Regulation Programme 9.23, C2Bioscience sector C2Bovine Spongiform Encephalopathy (BSE) 3.12Bridges Community Development Venture

Fund 5.37British Coal Corporation see CoalBritish Energy plc (BE) C6British Nuclear Fuels plc (BNFL)

financial data 2004 Fig 15.2restructuring 15.6Strategy Review conclusions 15.6

Broadband 2.128availability 8.11-8.13Britain Action Plan 5.15, 8.11-8.13current position 2.134-2.135, 8.12-8.13data systems used 2.138factors affecting performance 2.136-2.137forward look 2.139OVUM 2.138PSA target 2.134-2.139

Building Better Boards 11.10Business

see also E-business, Small businesseffective channels with Ch.8

competitiveness issues 8.18-8.19cross cutting sector 8.18-8.19expenditure on Fig. 8.1generally 8.1

250

Index


Notes: References are to chapter number and paragraph number. Example:11.36 indicateschapter 11, paragraph 36. A1 indicates Annex A1. A key to acronyms is listed in a separatetable.

Innovation and Growth Teams (IGTs) 8.4-8.5Manufacturing Strategy Review 8.6-8.10performance in 2004/05plans for 2005/06world class communications 8.11-8.17

small see small business start-ups

high growth 2.112increase in 2.99-2.105, 2.112

support 17.13cost-effectiveness, improving 2.192performance summary Fig. 2.11products 5.13, Ch.8 (text box)services 5.14

business enterprise research & development(BERD)data 2.36expenditure 2.30

Business Link anti-discrimination guidance 2.173best practice help10.6business support products

SMEs’ access to Ch.8 (text box)effectiveness of, improving 5.10-5.12 management of 16.2operators (BLOs) 2.191, 5.11

performance summary Fig. 2.11responsibility for network 6.21value for money assessment 2.191website 2.173, 5.12women users 2.151, 5.27, Fig. 2.9

Business Plan 1.6-1.7, 2.202, 6.3, 7.4, 7.5, 8.2,10.3, 14.3,15.3, 17.4-17.6, 17.11

Business support see Business

C

Cambridge/MIT Institute 4.9, C6CAMRA

super-complaint status 2.57Cancun Ministerial meeting 2.91, 2.94Capital Budget A3Capital Modernisation Fund (CMF) C4Carbon dioxide emissions see EmissionsCarbon Trust (CT) 4.10, C7Casson & Crispe 2.183Chemicals (REACH)

Registration, Evaluation and Authorisationof proposed regulation 12.10

Chronic Obstructive Pulmonary Disease(COPD)claims, settlement of 15.7-15.8scheme closed March 2004 15.7

Citizens Advice Service 2.57Civil Partnership Act 2004 10.9, 17.21Climate Change Programme Review (CCPR)

2.75Review 2.84, 2.88, 2.8912.7

CoalBritish Coal Corporation

concessionary fuel scheme 15.11Dismissed Miners Compensation

end of scheme 15.15minewater treatment programme 15.14Mineworkers Pension Scheme15.12Social Welfare Organisation 15.16Staff Superannuation Scheme 15.13

health liabilities 15.7-15.10 COPD 15.7-15.8 loss of services 15.10vibration white finger (VWF) 15.9

Mineworkers Pension Scheme 15.12non-health liabilities 15.11-15.16

Commission for Equality and Human Rights(CEHR) 10.3, 10.10

Common Agricultural Policy reform 9.22Common Commencement Dates (CCDs) 9.23,

10.25, C2Communications see Broadband, Digital

Switchover, 3G Mobile services

Community Development Finance Institutions(CDFI) 5.24

Community Innovation Survey (CIS) 2.29, 2.35Community Investment Tax Relief 5.24Companies Act 2004

Audit/Investigations/Community Enterprise5.30, 11.4, 11.5, 11.12, 17.21

Companies Housefinancial performance Fig. 16.6e-filing services 11.18, 16.3-16.4efficiency gains 17.13performancesummary 2.195 targets, against Fig.16.5

Index

251

pricing review 11.19value for money target 2.198

Companies Investigation Branch 11.13-11.15Company Law Reform Bill 17.23Company Law Review (CLR) 11.6, 17.23Competition Act 1988 5.30Competition Commission 2.45

report on extended warranties 2.43Competition regime

current position 2.39-2.42data systems used 2.48factors affecting performance 2.46, 2.47investigations 2.43-2.45Peer Review 2.48PSA target 2.38, 2.205

Competitive marketsextending 9.1-9.30

expenditure Fig. 9.1generally, 9.1performance in 2004/05 9.3-9.30plans for 2005/06 9.2promoting at home and abroad 9.13-9.16world markets

trade negotiations 9.17Competitiveness

issues 8.18-8.19Consultancy programme and capital

expenditurecompliance with Code of Practice C2indicator 2.195

Consumercredit reform 9.25-9.27direct, delivery of 2.56, 9.28-30empowerment and protection

current position 2.49-2.52data systems used 2.58EU, in the 9.9-9.10factors affecting performance 2.56forward look 2.59international comparisons 2.49-2.52OFT survey 2.53-2.55, 2.58PSA target 2.38, 2.205strategy 2.56, 2.57, 9.24

Consumer Credit Directive RIA C2Consumer Credit laws

reform 9.25-9.27Consumer Council for Northern Ireland

super-complaint status 2.57

Consumer Direct delivery 2.56, 9.28-9.30

Consumers’ Association 2.57Consumer Support Networks (CSNs) 2.57Corporate and Insolvency Activity

Companies Act 2004commencement dates 11.4

Companies House11.18-11.19expenditure Fig. 11.2EU Action Plan11.20-11.23generally 11.1-11.2governance 11.8-11.11

building better boards 11.10directors’ remuneration 11.11IAS, transition to 11.8operating/financial review requirement11.9

law 11.4-11.7bankruptcy restrictions orders 11.7investigators’ powers 11.4legislative powers, new 11.6regulatory activities 11.5

malpractice 11.12-11.17investigations 11.12-11.17

performance in 2004/05 11.4-11.23plans for 2005/06 11.3

Corporate Social Responsibility (CSR)Academy 12.13

Council for Science and Technology (CST)re-launch 3.15

Culture change C2

D

Department of Culture, Media and Sport(DCMS)science review 3.14

Department for Environment, Food and RuralAffairs (Defra) 2.58, 2.84, 2.89science review 3.14

Department for International Development(DfiD)G9O meetings, funding for 2.95joint responsibility as to trade barriers 2.90re-prioritised activities 2.96

Department of Trade and Industry (DTI)accommodation 2.195, 17.12Business Plan 1.6-1.7, 17.4-17.6Content Management System 17.8


252

Energy Security of Supply Working Group2.65Five Year Programme 1.4-1.5, 9.2, 17.3,17.6, 17.11key objective 2.97legislative programme 2004/05policies well represented in 17.20

managing Ch.17 accidents, days lost through C8better regulation objectives C2Capital Modernisation Fund C4consultation C2corporate

communications 17.7-17.9services 17.10

efficiency, delivering 17.11-17.13Electronic Service Delivery C1Environmental Performance C7generally 17.1Health and Safety Report C8Investment/Asset management C3Invest to Save Budget C5leadership 17.14-16legal services 17.20-17.24marketing communications 17.8, 17.9organisation/systemspeople and skills 17.17-17.19priorities, setting/delivering 17.2-17.6private sector sponsorship 17.8Public Accounts Committee reports C6Regulatory Impact Assessments (RIAs) C2sickness, days lost through 17.16

performanceappointments/correspondence 17.8Monitoring Committee 17.4summary Fig.2.11

Shareholder Executive see ShareholderExecutive

staffcosts Fig.2.11numbers A6

Strategy 1.1-1.3, 6.7, 17.1, 17.6support products

access to Ch.8 (text box)Department of Transport

Climate Change Programme 2.89White Paper 6.18

Digital TV Switchover 5.17, 8.14-8.15

Directors’ Remuneration Report Regulationsapplication/effectiveness 11.11, C2

Discriminationage 10.7-10.8law review 10.3perception in the workplace 2.175

Disabled personspublic appointments 17.19senior civil service, in the 17.18

Disability at workstrategy 17.18

Doha Development Agenda 2.91-2.92, 9.17

E

Early Growth Funds 5.37E-business

broadband market 2.128, 2.134-2.139business.gov 2.193current position 2.123-2.126, 2.134-2,135data systems used 2.131-2-133, 2.138factors affecting performance 2.127-2.130,2.136-2.137forward look 2.139ICT take-up and use 2.123-2.133PSA target 2.122, 2.205related target 2.139world defined 2.132

Economic growthgap in rates of, reducing 2.112-2.122

current position 2.113-2.115data systems used 2.119-2.121factors affecting performance 2.116-

2.118forward look 2.122

PSA target 2.112-2.122regional 2.112-2.122

current position 2.113-2.115data systems used 2.119-2.121factors affecting performance 2.116-

2.118forward look 2.122

Electrical goodsextended warranties on 9.14

Electricityconsumption C7prices 2.64Scottish market, plans to open up 13.8-13.9

Electricity Security of Supply Directive C2

Index

253

Electronic service delivery C1Emissions

carbon dioxide 2.79, 2.80, 2.83, C2fluorinated gases 2.81greenhouse gas 2.78, 2.80, 2.82, 2.205hydrofluorocarbon 2.82methane 2.80nitrous oxide 2.80perfluorocarbon 2.82sulphur hexafluoride 2.82

Employmentsee also Workplace, maximising potentialdiscrimination review 10.3minimum wage 10.1, 10.14rate, ethnic minorities 2.168-2.176 Fig.2.10relations 10.19, 10.26-10.29, 17.21Working Time Directive 10.11Working Time Regulations 10.15

Employment Agency Standards (EAS)inspectorate 10.16-10.17

Employment Relations Act 2004 10.19, 17.21,C2

Employment Tribunals ServiceACAS and 10.28applications by jurisdiction Fig.16.15financial performance Fig.16.16performance

summary Fig.2.11targets, against Fig.16.14

user satisfaction 16.9value for money target 2.201

Energycarbon dioxide emissions 2.79competitive market, ensuring 13.5-13.8current position 2.60, 2.61, 2.76-2.79data systems used 2.73, 2.74

emergency plan 13.10emissions

current position 2.78-2.79data systems used 2.85-2.87factors affecting performance 2.83-2.84progress summary 2.80-2.82

environment, and 2.75-2.90, 12.9EU markets, liberalisation of 13.12

factors affecting performance 2.69-2.72forward look 2.88-2.90fuel poverty

data 2.74

higher prices, impact of 2.71, 13.7objectives 2.67-2.68 , 2.205, 13.7greenhouse gas emissions, 2.75-2.90,2.205current position 2.78

Iraqi oil sector reconstruction 13.13Kyoto target 2.75, 2.78market competitiveness 2.60-2.61, 13.5-13.11Norway, agreement with 13.11oil/gas reserves

exploitation 13.322nd Offshore Licensing Round 13.4

performance in 2004/05 13.2plans for 2005/06 13.2PILOT 13.3prices 2.62-2.64

data 2.73higher, impact of 2.71

PSA target 2.59, 2.205renewable 12.8, C7

offshore wind farms 12.8security of supply 13.2-13,13

expenditure on Fig. 13.1generally, 13.1regular reporting 2.65-2.68Scottish electricity market

project to open up the 13.8-13.9sustainable use of natural resources2.75-2.90

current position 2.76, 2.77UK ranking, to ensurethree most competitive markets, in top2.60-2.74White Paper 2.65, 12.14, 13.1

Energy Act 2004 13.8-13.9, 15.4, 17.21Energywatch

super-complaint status 2.57, 13.5Engineering see Science and Engineering

BaseEnglish House Condition Survey (EHCS) 2.74Enterprise

disadvantaged communities, in 2.99, 2.106-2.118, 5.23-5.28culture 5.18-5.22growth and business investment

Business Link, improving 5.10-5.12expenditure Fig. 5.3


254

finance, access to 5.33-5.41generally 5.1-5.4grant expenditure Fig. 5.2launch investment 5.42, Fig. 5.3performance in 2004/05 5.6-5.21plans for 2005/06 5.5service delivery, improving 5.6-5.9

offenders, of 5.23productivity growth by size of Fig. 2.7

social 5.23, 5.29-5.32society

achievements in 2003-04building 2.99, 5.1-5.4current position 2.100, 2.103, 2.106,2.107, 2.113-2.115data systems used 2.102, 2.105, 2.110,2.111, 2.119factors affecting performance 2.101,2.104, 2.108, 2.109, 2.116-2.118forward look 2.112PSA targets 2.99, 2.205related targets 2.112

under-represented groups 5.23-5.28VAT registration rates Fig. 2.8women’s 2.149-2.152, 4.2, 5.25-5.28,Fig. 2.9

Enterprise Act 2002effect of 2.57, 9.15

Enterprise Capital Fund (ECF) programme 5.5,5.35-5.3

Enterprise Promotion Fund 5.18, 5.20Environment Agency 2.76Environmental performance C7Equal Opportunities Commission

report on EPRs 2.147-2.148 Equal Pay Reviews (EPRs)

gender equality indicator 2.147—2.148,Fig. 2.9

Equal Treatment Directivetransposition into UK law C2

Equalitysingle body 10.10

Ethnic minoritiesemployment rate

current position 2.168-2.171data systems used 2.174-2.175factors affecting performance 2.172-2.173

forward look 2.176PSA target 2.167, 2.205, Fig. 2.10

labour market and the Task Force 2.173public appointments 17.19regional for a 2.173senior civil service, in the 17.18

Ethnic Minority Business Forum 2.173EU Emissions Trading Scheme (EUETS) 2.75,

12.4Europe

opening markets in 9.3prosperity for all in 9.4-9.8

European Union (EU)Automobile Manufacturers Association C2Company Law/Corporate Governance

action plan 11.20-11.21Better Regulation Plan C2competition policy, debate on 9.11Competitiveness Council

economic reform in 9.4-9.8informal 9.3Key Issues Paper 9.4

consumer policy, debate onprotection 9.9-9.10

Consumer Protection Co-operation Regulation 9.9End of Life Vehicles Directive 12.11

transposition into UK law C2Entrepreneurship Action Plan 5.22Environmental Technologies

action plan 12.12Generalised System of Preference

renegotiation 9.18review in 2006 9.2

General Product Safety Regulations 9.12Innovation Action Plan 4.13Mergers Regulation, new 9.11opening markets in 9.3Regional Development Fund

expenditureprovision Fig.

Registration, Evaluation and Authorisationof Chemicals (REACH), proposed regulation12.10Research & Technological Development(RTD)

Seventh Framework Programme (FP7)3.35

Index

255

Sixth Framework Programme (FP6) 3.33 single market in services

progress 9.8, 9.12Six Presidency Statement 9.7, C2Services in the Internal Market

Directive 9.12Structural Funds

cost-effective use of 6.3Programmes

duration 6.15reform 6.16

proposed Regulations 6.14-6.17Takeovers Directive 11.22UK presidency, preparation for 9.3, C2Unfair Commercial Practices Directive 9.10

Executive Agencies Ch. 16, B5running costs, reduction of 17.13

F

Finance for Investment Advisory Boardestablishment 5.36

Financial Reporting Council (FRC) 11.5Five year programme 1.4-1.5, 9.2Flexible working

gender equality 2.145-2.146, Fig. 2.9Food Standards Agency Foreign and Commonwealth Office

analytical resources 2.95joint responsibilities 2.90

Foreign direct investmentcurrent position 2.184-2.185data systems used 2.186forward look 2.187PSA target 2.176related targets 2.185

Foresightaims 3.16Brain Science, Addiction and Drugs 3.20Cyber Trust and Crime Prevention 3.18Detection and identification of InfectiousDiseases 3.22Exploiting Electromagnetic Spectrum 3.19Flood and Coastal Defence 3.17Horizon Scanning Centre within 3.23Intelligent Infrastructure Systems 3.21projects

completed in 2004/05 3.17-3.19ongoing/launched in 2004/05 3.20-3.23

Fuel povertydata 2.74higher energy prices, impact 2.71, 13.7targets 2.67-2.68, 2.205, 13.7

G

Gasconsumption C7prices 2.63

Gender equalitychildcare 2.160-2.161, Fig. 2.9current positions 2.140-2.141data systems used 2.166domestic violence 2.162-2.165, Fig. 2.9equal pay reviews 2.147-2.148, Fig. 2.9factors affecting performance 2.142-2.165flexible working 2.145-2.146, Fig. 2.9forward look 2.167judicial appointments 2.157-2.159, Fig. 2.9monitoring 2.142-2.144PSA target 2.139, 2.205public appointments 2.153-2.154, Fig. 2.9senior civil service 2.155-2.156, Fig. 2.9steering group 2.143sub-targets 2.148—2.165, Fig.2.9women, under-represented 2.149-2.152,5.25-5.28, Fig.2.9

“Genetically modified” 3.12Global Competition Review 2004 2.42Global Entrepreneurship Monitor (GEM) 2-101Government Skills Strategy Ch.8 (text box)Graham Reviewrecommendations 5.34, 5.36Grants

innovative ideas, investigating Ch.8(text box)research and development Ch.4 (text box),5.41, Ch.8 (text box), Fig. 5.2

Greenhouse gas emissions 2.78, 2.80, 2.82,2.205

H

Health and SafetyExecutive (HSE)

science review 3.14Report C8

Higher Education Innovation Fund (HEIF) 4.7


256

Higher Education Institutes (HEIs)Business Community Interaction (HEBCI)2.21, 2.23-2.25 Fig. 2.3

Hong Kong WTO Ministerial 2005 9.2Hydrofluorocarbon (HFC) see Emissions

I

Information and Communication Technologies(ICT)Broadband 2.128, 2.134-2.139data systems used, quality of 2.131-2.133factors affecting performance 2.127-2.130PSA target 2.123-2.139related target 2.139take-up and use 2.123-2.133world defined 2.132

Information and Consultation of EmployeesRegulations 2004 10.18

Information, Technology, Electronics andCommunications (ITEC) women in 2.152, Fig. 2.9

Innovation and Growth Teamsrecommendations 8.4-8.5

Innovation Reportkey achievements Ch.4 (text box)Technology Strategy 4.2, 4.3-4.6

Insolvency Serviceefficiency gains 17.13financial performance Fig.16.12funding 16.8reforms, implementation of 16.8performance


redundancy payments Fig.16.13value for money target 2.200

Intellectual propertyawareness campaign Ch.4 (text box)

International Accounting Standards (IAS)transition to 11.8, C2

International Benchmarking Study (IBS) G7 countries as benchmarks 2.131measurement approaches 2.133Sophistication Index 2.123-2.124

International Business Schemes 7.7International Department Business Register

(IDBR) 2.110International Energy Agency 2.73

Invest to Save Budget C5Investment, finance for

access to 5.33-5.41Aerospace Launch Fig. 5.3Bridges Community Development Venture

Fund 5.37Early Growth Funds 5.37Enterprise Capital Fund 5.35-5.36expenditure Fig. 5.2Launch 5.42no-nonsense guides to 5.40Regional Venture Capital Funds 5.37research and developmentgrant 5.41 Fig. 5.2Small Business Investment Taskforce 5.39Small Firms Loan Guarantee 5.33-5.34Fig.5.1

J

Jobcentre Plus 2.173Joint Ofgem/DTI Energy Security of Supply

Working Group (JESS) 2.65, 2.72Judicial appointments

women, of 2.157-2.158, Fig. 2.9

K

Knowledge Transferexpenditure on Fig. 4.1innovation and 4.1-4.18Network funding 4.6, Ch.8 (text box)partnerships Ch.8 (text box)performance in 2004/05 4.3-4.18plans for 2005/06 4.2PSA target 2.14

Kyoto Protocol target under 2.75, 2.78

L

Labour Force Survey 2.174-2.175Labour Market Task Force 2.173Lambert Review 3.6Legal Services D

role 11.16-11.17Liabilities

statement of contingent/nominal B2Lisbon agenda 9.11 Lisbon Mid-Term Review

Index

257

Kok report 9.4

M

Manufacturing Advisory Service establishment 8.8-8.10

Manufacturing Strategy Review 8.6-8.10Measurement for Emerging Technologies

Programmeformulation for approval 4.17

Measuring Instruments Directiveimplementation 4.16transposition into UK law C2

Methane emissions see Emissions3G Mobile services

current position 8.16MicroNano Network (MNT) 4.11-4.12

N

Nanotechnology 3.12National Allocation Plan (NAP)

EUETS, for 12.4-12.6National Audit Office (NAO) 4.9National Composite Materials Network

launch 4.6National Consumer Council 2.57National Council for Graduate

Entrepreneurship 5.19National Employment Plan National Environment Technology Centre

(NETCEN) 2.85-2.87National Minimum Wage Act 1998 10.14

enforcement 10.1National Regional Partnership Programme

Ch.6 (text box)National Standards Strategic Framework 4.18National Weights and Measures Laboratory

(NWML)direct services to industry from 4.15-4.16new strategic plan 16.7operation 16.6performance

financial Fig.16.10targets, against Fig.16.9

Nitrous oxide emissions see EmissionsNon-departmental Public Bodies (NDPBs) B5

review 3.12Nuclear liability

reduction of civil 2.205, 15.3Nuclear security

British Energy, restructuring 14.11-14.13Civil Nuclear Constabulary 14.10expenditure Fig. 14.1export controls 14.4-14.5generally 14.1-14.2G8 Global Partnership 14.9JEWEL project 14.4legacy of FSU 14.6-14.9liabilities 15.4-15.6Norway, agreement with 14.8performance in 2004/05 14.4-14.13plans for 2005/06 14.3safety/third party liability and 14.10-14.13

Nuclear Decommissioning Authority (NDA)establishment Ch.15 (text box)PSA target 15.3

O

Office of Deputy Prime Minister (ODPM)economic performance of English regions

improvements, making sustainable2.113-2-122, 6.2

English House Condition Survey 2.74Index of Multiple Deprivation 2.110, 2-111Planning Policy Statement 1 6.18

Office of Fair Trading (OFT)Art. 82, new guidelines for application of9.16Consumer Empowerment Survey 2.53-2.55,2.58market studies 9.13, 9.14reports 2.43-2.45

Office of Gas and Electricity Markets (OFGEM)reports 2.65, 13.5

Office of Government Commerce (OGC)Action Plan 5.16

Office of Science and Technology (OST)capacity building fund 3.6Horizontal Scanning Unit 3.13, 3.23Roberts Review, implementation 3.29role 3.2, 3.10, 3.12, 3.13, 3.17, 3.25SETNET, support for 3.31

Operating and Financial Review (OFR)requirement for 11.9


258

P

Partnership at Work Fund 10.20-10.21Patent Office

financial performance Fig.16.8efficiency target 16.5performance


Trading Fund, a 16.5value for money target 2.19

Patents Act 17.21Pathway to Work initiative 2-117Peer Reviews 2.46-2.48Perfluorocarbon emissions see EmissionsPhoenix Development Fund, 5.23, 5.24Postal services liabilities 15.17-15.20

Royal Mailexpenditure Fig. 15.4financial targets Fig. 15.3

Postwatch 2.57Productivity growth

current position 2.6-2.10data systems used 2.12drivers 6.2factors affecting 2.11forward look 2.14government’s objective hour, per Fig.2.2international comparisons, Figs. 2.1, 2.2PSA target 2.6, 2-205size of enterprise, by Fig. 2.7worker, per Fig. 2.1

Programme and capital expenditureindicators 2.190-2.195

Promoting Women’s Enterprise Support (PROWESS) 5.26, 5.27

Public Accounts Committee (PAC) 4.9, C6Public appointments B7

delivering diversity in 2.153, 17.19Public sector

procurement 5.16Research Exploitation funding 4.8Research Establishments (PSREs) 2.19,2.26-2.28SME’s under-representation women in, 2.153-2.154, Fig. 2.9

Public service agreement (PSA) targetscompetition levels 2.38-2.548

consumer empowerment/protection 2.39-2.59delivery progress Ch. 2e-business, as to 2.122, 2.205energy market, ensuring competitive 2.59enterprise society, building 2.99, 2.205ethnic minorities’ employment rate 2.167,2.205, Fig.2.10exploitation of science base 2.14foreign direct investment 2.176generally 2.1-2.5international productivity comparisons

hour, per Fig. 2.2worker, per Fig. 2.1

performance, factors affecting 2.11productivity growth, raising , 2.5-2.14regions, economic performance of all 2.112,2.205relative international performance

factors affecting 2.16UK science/engineering base 2.14-2.38

Trade & Investment’s customers’performance 2.176, 7.1trade barriers, reducing 2.90, 2.205value for money improvements 2.187

Public spendingtotal A1

R

Regional Development Agencies (RDAs)achievements in 2004/05 6.21 Business Link network 6.21efficiency benefits 17.16funding 6.5, Fig. 6.2Knowledge Transfer (KT) strategy 3.6new approach to tasking 6.4-6.6partnership-based approach of DTI 6.4-6.21promoting 6.4-6.10PAC recommendations C2role 3.6, 6.19 statutory responsibilities 6.20-6.21technology priorities 4.4-4.5

Regional economies, strengthening expenditure Fig. 6.3generally 6.1-6.2performance in 2004/05 6.4-6.21plans for 2005/06 6.3

Regional Economic Performance (REP) 6.10

Index

259

Regional Ethnic Minority Business Foradevelopment of 2.173

Regional Government Offices (GOs)implementation of DTI Strategy/

Business Plan 6.7-6.8Regional Science and Industry Councils 3.8,

Ch.4 (text box)Regional Venture Capital Funds 5.37Regions

see also Regional Development Agencieseconomic performance, strengthening

current position 2.113-2-115data systems, quality of 2.119-2.121factors affecting performance 2.116-2-

118forward look 2.122PSA target 2.112, 2.205

European Structural Funds 6.3, 6.14-6.167spend on function/programme by A9total spend by A7, A8

Regulatory Impact Assessments (RIAs) C2Regulatory reform C2Research and development (R&D)

business 4.2collaborative Ch.8 (text box)excellence, funding for Ch.4 (text box)grants Ch.4 (text box), 5.41, Ch.8 (text box),Fig. 5.2tax credits 5.6

Research Councilsgrant-in-aid B3long term projects B4

Resourcebudget A2estimate tables B1

S

Science and Engineering BaseChief Scientific Advisor (CSA) 3.11, 3.13data systems used, quality of

CIS 2.35BERD 2.36Evidence Ltd 2.17HEBCI 2.23-2.25, Fig. 2.3OECD 2.17patent data 2.37PSRE 2.26-2.28, Fig. 2.4Thomson ISI 2.17

Dorothy Hodgkin Postgraduate Awards 3.38Dual Support Reform Consultation

government response 3.9European Research, getting the best expenditure on Fig. 3.3exploitation of

current position 2.8, 2.19data systems used 2.23-2.28factors affecting performance 2.20-2.22

Foresight projects 3.16-3.23global policy 3.36-3.39government support 3.10-3.12Higher Education Business Community

Interaction (HEBCI) 2.21, 2.23-2.25,Fig. 2.3

international performance, improving ,2.14-2.38, 3.1-3.2Lambert Review 3.6Newton Awards 3.3performance

summary Fig.2.112004/05, in 3.4-3.39

plans for 2005/06 3.3programme and capital expenditureindicator 2.190PSA target 2.14, 2.205Public Research Sector Establishments(PRSEs)

Indicators Fig.2.4funding 4.7

relative performancecurrent position 2.15data systems used 2.17factors affecting 2.16

Research Councils activities 3.6-3.9administration/performance/planning3.24Arts and Humanities, establishment 3.26capital assets Fig. 3.1effectiveness 17.13international subscriptions by Fig. 3.2Knowledge Transfer (KT) strategy 3.6OST reports 3.25Science Budget allocations 3.24

research sustainability 3.4-3.9Royal Society/Academy of Engineering

grant-in-aid 3.32


260

nanoscience/nanotechnoloty report 3.12SET for Success

Roberts Review 3.29SETNET 3.31society, and

agenda, taking forward 3.27-3.32public engagement , 3.28research careers 3.29women, as to

UK economybusiness R&D as share of GDP Fig.2.5current positions 2.29-2.31data systems used 2.35-2.37factors affecting performance 2.32-2.34forward look 2.38overall innovation performance 2.29-2.38patent grants Fig. 2.6

Science & Industry councils 3.8, Ch.4(text box)

Science and Innovation InvestmentFramework 3.4-3.5, 3.6Global Science and Innovation Forum (GSIF)

establishment 3.36workstreams, coordination of 3.38

Science, Engineering and Technology (SET)diversity in 3.30-3.32Roberts Review 3.29SETNET 3.31vision of 3.27women in related bodies 2.149, 3.30,Fig.2.9workforce 3.30-3.32

Science Research Investment Fund 3.7Selective Finance for Investment in England

(SFIE)delivery 6.12-6.13expected expenditure by region Fig. 6.1launch 6.11

Self-employmentroutes into 5.21

Senior Civil Service (SCS)diversity in 17.18leadership programme for 17.15salaries B6women in 2.155-2.156, Fig. 2.9

Services Directiveprogress on 9.2

Sexual orientation

EU legislation awareness 17.18Shareholder Executive

activities 15.23core portfolio companies 15.4establishment 15.2responsibilities 15.21-15.22

Shareholders’ Pre-emption Rightsreview of 11.23

Small and Medium Enterprises (SMEs)access to finance 5.33-5.41

guide 5.40increase in 2.99intellectual property awareness campaignCh.4 (text box)new-to-export 7.2, 7.3productivity 2.99, 2.103-2.105public sector procurement 5.16research and development grants Ch.4(text box) support services 7.2, 7.3

Small businesssee also Small and Medium Enterpriseaccess to finance, 5.33-5.41guide 5.40growth capital for 5.35-5.37market failures, addressing 5.38-5.39productivity 2.99, 2.103-2.105research and development grants 5.41support services, access to 5.37

Small Business Investment Taskforce 5.39Small Business Research Initiative 5.7, 5.16Small Business Service (SBS)

activities 5.6-5.10, 16.2Analytical Unit 2.102Business Link Operators (BLOs) 2.191, 5.11Chief Executive’s Business Transfer

review 5.8common commencement dates (CCDs)9.23, C2Enterprise Promotion Fund launch 5.20executive agency, launched as an 16.1financial performance Fig. 16.4Household Survey of Entrepreneurship2.102National Council for Graduate Enterprise5.19performance against targets2003/04 Fig.16.1

Index

261

2004/05 Fig.16.2Phoenix Fund 5.23, 5.24Social Enterprise Coalition

support for first conference 5.32service first performance Fig.16.3

targets, performance against2003/04 Fig.16.12004/05 Fig.16.2

website ‘at a glance’ C2Small Business Support Strategic Alignment

Project 5.14Small Firms Consultation database 9.23Small Firms Loan Guarantee Scheme 5.5,

5.33-5.34, 8.1, Fig. 5.1Graham Review recommendations 5.34, 5.36

Social Enterprise Visits Programme 5.23Social enterprise 5.23, 5.29-5.32

see also Ethnic Minorities, Gender equality,Women

Spending Review 2004approach to 17.5White Paper 2004 2.203

Strategy Ch. 1, 2.202-2.203Sulphur hexafluoride emissions see EmissionsSure Start Programme Board 2.161Sustainable Development Strategy 12.1Sustainability and the environment

aims against costs, balancing12.10-12.11climate change 12.4-12.7corporate social responsibility 12.13EU’s Action Plan on technology 12.12generally 12.1-12.2legislative developments 12.14performance in 2004/05 12.4-12.14plans for 2005/06 12.3PSA target 2.60redundant oil/gas facilities 12.9renewable energy 12.8

T

Technical infrastructure 4.14Technology Programme

implementation 4.6Technology Strategy Boardestablishment 4.3role 4.3Tradebarriers, reducing, 2.90-2.99

assessment of progress 2.98current position 2.91, 2.92factors affecting 2.93-2.95forward look 2.99joint target with DfiD and FCO 2.90PSA Target 2.90, 2.205White Paper 2.93

disputes, minimising 9.19-9.21investment, and

generally 7.1-7.3White Paper on 9-18, 9.22

key objective of DTI 2.97

U

UK Atomic Energy Authority (UKAEA)Strategic Review 15.5turnover analysis Fig.15.1

UK Energy Research Centre (UKERC) 4.10UK EU and G8 presidencies

preparation for 9.3UK Trade & Investment

customers’ performance 2.176data systems used 2.182-2.183factors affecting 2.177-2-181PSA target 2.76related targets 2.185

departmental report 2.176, 7.5exhibitions/missions/seminars

participants supported Fig. 7.1expenditure Fig. 7.3, Fig. 7.4Global Partnerships 7.13-7.14information/support 7.6-7.7international business, winning 7.6-7.14investment programme expenditure inward investment 7.2, 7.15-7.18

cases/effect on jobs Fig. 7.2successes 7.17-7.18

new-to-export 7.4SMEs 7.2-7.3

objective 7.1online information/services 7.8Passport Programme 7.12performance in 2004/05 7.5-7.18plans for 2005/06 7.4PSA target 2.176, 7.1services

customer-focussed 7.8-7.9trade support 7.10-7.11


262

website 7.8Union Modernisation Fund 10.3, 10.19United Nations Conference on Trade andDevelopment (UNCTAD)

World Investment Report 2.184-2.186University of Reading Business School 2.182

V

Value for money, achievingcurrent position 2.188-2.189data systems used 2.204factors affecting performance 2.202-2.203forward look 2.205objectives and performance targets 2.205PSA target 2.187related target 2.204-2.205summary of performance Fig.2.12

VAT registrationsrates

adults, per 10,000 Fig. 2.8data systems used 2-110increase in 2.108-2.109

Veterinary medicines, prescription onlyCompetition Commission recommendations9.15

W

Waste Strategy 2.76, C7Water

consumption C7Watervoice

super-complaint status 2.57Women

Business Link customers 2.151, 5.27childcare 2.160-2.161, Fig. 2.9domestic violence and 2.162-2.165, Fig. 2.9entrepreneurs 2.151, 4.2, Fig. 2.9Equality Unit, and 2.142, 2.143, 2.159,2.161, 2.166equal pay reviews 2.147-2.148, Fig. 2.9flexible working 2.145-2.146, Fig. 2.9ITEC, in 2.152PROWESS 5.26, 5.27public appointments 2.153-2.154, Fig. 2.9science, engineering and technology, in2.149-2.150 Fig. 2.9senior civil service, in 2.155-2.156, Fig. 2.9

UK Resource Centre for Women in SET2.150under-represented sectors, in 2.149-2.152,5.25-5.28, Fig. 2.9

Working Time Directive 10.11Working Time Regulations 10.15Workplace, maximising potential

diversityage discrimination 10.7-10.8promoting 2.173same sex partnerships 10.9single equality body 10.10

employment relations 10.26-10.29ACAS 10.26, 10.27-10.28dispute resolution 10.26Employment Tribunals Service 10.26, 10.29

expenditure Fig. 10.2generally 10.1-10.2legislative framework 10.11-10.25

agency work 10.12, 10.16-10.17common commencement dates 10.25Equal Opportunities Commission guidance 10.23-10.24information/consultation 10.18-10.22migrant workersminimum wage 10.13-10.14, Fig. 10.1partnership 10.20-10.21trade union recognition/rights 10.19working time 10.11, 10.15

performance in 2004/05 10.4-10.29plans for 2005/06 10.3skills

best practice 10.6Business Network, for 10.4regional partnerships (RSPs) 10.5sector councils 10.4strategy implementation 10.4

World Trade OrganisationCancun Ministerial Conference 2.91. 2.94Fifth Ministerial meeting 2.91, 2.94Framework Agreement 9.17

Y

Yorkshire Forward 3.23, 9.15Young Enterprise 5.18-5.19

Index

263

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